FW
The man-made fabric hub in Surat wants the embroidery and zari sectors to be included in the Amended Technology Upgradation Fund Scheme. In a cluster like Surat, there are around 1.50 lakh embroidery units working in the decentralized and unorganized sector. However, each process in garment manufacturing is carried out by distinctly by different units. Despite this the embroidery sector has been excluded from the benefits of subsidy under the ATUF.
As of now embroidery machines qualify for subsidy in ATUF only if they are used in the readymade garment units. Zari units find no mention in ATUFs.
The zari industry of Surat is one of the oldest handicrafts whose origin can be traced to the Mughal period. Surat is one of the biggest and most significant zari manufacturing centers in India.
The principal type of products are real gold and silver threads, imitation gold and silver threads, and the zari border weaving, embroidery, laces, caps, turbans, saris, and blouse pieces. Gold and silver threads are commonly used for weaving the kinkhab.
What makes production process of Surat zari unique is its silver electroplating process. In this process zari is produced by using fine copper wires with silver coating that are shining and acquire multiple hues.
The World Export Development Forum (WEDF) will be held in Sri Lanka, October 12 and 13, 2016. Between 400 and 600 delegates are expected to attend the WEDF. The theme for the forum, the 16th of its kind, is Trade for Success: Connect, Compete, Change.
A unique global conference and business-to-business matchmaking event dedicated to supporting trade-led development, the WEDF is expected to look at the changed game in sustainable trade and its impact on businesses, including small and medium-sized enterprises, which form the backbone of economies.
The World Export Development Forum represents an excellent opportunity for Sri Lanka to effectively showcase the depth and maturity of its capability as an exporter, not just of apparel, but of many other exciting and complex products.
The event will be supported by Brandix. Brandix is the pioneer of the concept of total solutions in Sri Lanka’s apparel sector and is a preferred supplier to some of the top retail brands in the US and Europe.
Brandix is also a benchmark and international award winner for eco-friendly apparel manufacture and commitment to environmental best practice. It was ranked Sri Lanka’s most valuable export brand in a ranking of the country’s leading brands.
Myanmar's ascent in the garment world is fairly recent but is happening rapidly. One reason is Myanmar’s minimum wages for the garment industry are around $90 a month, the lowest in the region. In comparison, it is around $100 in Laos, $140 in Cambodia and around $150 in Vietnam.
The country is the largest in mainland southeast Asia by geographical area and is rich in natural resources. It also has a young population. In addition, Myanmar also enjoys tax exemptions from the EU market, which makes up 23 per cent of its garment exports. Other key markets are Japan, South Korea and China. Lower import tariffs than many of its Asean peers also work in favor of Myanmar.
Myanmar’s export industry is expected to reach $12 billion by 2020 and to create 1.5 million jobs. Relaxation of foreign direct investment rules, benefits for foreign investors like tax exemptions in the first five years and tariff-free imports of raw materials are expected to keep the country a suitable apparel sourcing destination for the garment industry.
China’s manufacturing industry for one is looking to minimise production costs by relocating production facilities to relatively accessible markets in Southeast Asia such as Myanmar.
With cotton prices on the rise, the Textile Ministry has directed the Cotton Corporation of India (CCI) to sell cotton purchased by it. This is to keep prices of the commodity under check. In a couple of days, the CCI will start e-sale of cotton stock with it to micro, small and medium-scale (MSMS) textile mills directly at minimum support price, it is understood. This year, the CCI purchased 8.4 lakh bales of cotton at minimum support price this year. Out of this, it has supplied nearly two lakh bales to the National Textile Corporation (NTC) and state co-operative mills. It had also sold about 1.5 lakh bales a month over the last four months through e-auction.
Now the 27,000 bales that the CCI has with it will be sold to small and medium-scale mills. The sales will be executed through e-auction and only small and medium-scale mills will be able to bid for the stocks. This will benefit the small and medium-scale mills. The main reason for the spiraling prices was CCI selling cotton to multinational companies and large buyers. In fact, the CCI should sell cotton at just minimum support price and the cost incurred for storing the cotton till now should be passed on to the domestic textile mills so that prices come down.
In its zest to boost its 'Make in Maharashtra' plans and generate employment, the Maharashtra government is working on a niche policy to promote investments in the garment and apparel sector. The policy, which is being worked out by the state industries department, will focus on setting up garment and apparel units in the cotton-growing areas of Vidarbha and Marathwada which are also known for agrarian distress and farmer suicides. Officials are of the view that the economic benefits of value-addition to raw cotton would also percolate down to the farmers while generating direct and indirect employment.
The policy will look at granting fiscal and non-fiscal incentives like land in areas held by the Maharashtra Industrial Development Corporation (MIDC), would grant FSI and allot plots for garment and apparel units in the 10 textile parks to come up in Vidarbha and Marathwada.
According to a senior state industries department official, the apparel sector is one such that is low on investments but high on manpower. The department is considering a special policy for the garment and apparel sector. He further went on to say that they would promote such industries and units in Vidarbha and Marathwada. Maharashtra already has a policy for the textile sector, and this niche, sectoral policy for garments and apparels will further boost investments.
The initiatives would benefit women as the sector employed the female folk in large numbers. India is the largest cotton producer and has the second largest textile manufacturing capacity globally with 24 pesr cent of the world's spindles and 8 per cent rotors. While contributing 14 per cent to industrial production and 4 per cent to India's GDP, the textile industry employs over 45 million people directly.
Around 16 Bangladeshi fabrics and garment manufacturers will take part in an apparel exposition titled ‘Texworld – Apparel Sourcing that would go on from September 12-15 at in Paris. They will participate in the four-day international fair that would be supported by Bangladesh’s Export Promotion Bureau. The Export Promotion Bureau (EPB) will set a national pavilion for the Bangladeshi participants.
A wide range of fashion products from major manufacturing countries like China, South Korea, India, Indonesia, Taiwan, Thailand, Turkey and Pakistan will be on show at the fair, informs Messe Frankfurt, one of the world’s largest trade fair companies that is organising the fair. Among the garment companies that are participating are: Anthony Young Garments, Centex Textile and Apparels, Century Apparels, Chorka Textile, DK Knitwear, JM Knitwear, Jericho Imex Limited, MK Sweaters Ltd, Nazia Apparels, Needle Fashion, Sinha Knit Industries and Unitex Attires Limited.
Jack & Jones, one of Europe’s leading producers of menswear cooperates with the Cotton made in Africa (CmiA) initiative to combine fashion with sustainability. As first CmiA Demand Alliance partner in Denmark, the company now offers clothes carrying the CmiA seal which are completely made in Uganda – from cotton field until finished product. By purchasing textiles with the CmiA sustainability seal consumers can directly support to improve the living conditions of smallholder cotton farmers, protect the environment and create job opportunities within the textile value chain for the local communities in Uganda.
As first Danish textile brand Jack & Jones now offers clothes that carry the Cotton made in Africa sustainability seal. Special about these items are the added values for the people producing them across the complete textile value chain in Uganda. Jack & Jones love cotton and it is our most important raw material. Through our ambitious Cotton Strategy we want to support that cotton is grown under better social and environmental conditions. Our partnership with Cotton Made in Africa supports this goal, according to Dorte Rye-Olsen, Sustainability Manager at Jack & Jones.
According to Tina Stridde, Managing Director of CmiA, the cooperation with Jack & Jones and the recent development from cotton to textiles made in Africa initiates a major shifting point in the history of CmiA and for the textile industry in Uganda.
European Union remains committed to its partnership with India despite the exit of Britain, EU Ambassador to India Tomasz Kozlowski recently. Kozlowski believes India is an important factor in the international arena. While India is the EU’s 10th trading partner, India’s is their largest trading partner. Last year, trade between India and the EU stood at 100 billion euros.
According to Kozlowski, the India-EU summit during Prime Minister Narendra Modi’s visit to Brussels in March this year invigorated the partnership. The summit adopted a number of agreements that are very result-oriented, he said. We have analysed all Indian flagship programmes. He said that the EU has made some suggestions regarding the flagship programmes of India but stressed that these were not in the form of assistance but as a partnership.
While the EU-India clean energy and climate partnership has been launched, the EU-India startup partnership would be launched in October this year, the Ambassador, who hails from Poland, said. He said that the European Investment Bank (EIB) has launched a credit line of 1.2 billion euros for Indian partners.
Rising imports of used garments has posed a double whammy for garments manufacturers, at a time when Rs 2,50,000-crores domestic apparel industry is facing severe demand slowdown. Categorised as restricted item, the government has issued only 16 licenses so far for players only in Kandla Specialised Economic Zone (SEZ). Import of used garments elsewhere in the country is banned.
A number of unauthorised importers also bring in consignments at Kolkata, Chennai and Mumbai ports, while these 16 authorised importers have been bringing in used garments into India already. Thus, unauthorised importers contribute equivalent to the quantity of official imports if not more.
According to industry estimates, overall 90 containers worth $40,000 each of used garments primarily from the United States, European countries etc hit Indian ports every month. Its import has doubled in the last one year due to importers malpractices, said an importer on condition of anonymity.
Experts say, importers bring in fresh garments by misleading declarations for evading taxes. As against up to 15 per cent of taxes levied on fresh garments, the used ones attract taxes on per piece basis, which works out to negligible.
"India has a unique opportunity to reverse the decline in its export share and seize a global leadership position. Some of this opportunity is arising due to changing labour dynamics in China, which has been the world’s textiles behemoth. Indian the textile sector is one of the four most labour-intensive sectors of the economy, along with construction, agriculture and tourism sectors."
India has a unique opportunity to reverse the decline in its export share and seize a global leadership position. Some of this opportunity is arising due to changing labour dynamics in China, which has been the world’s textiles behemoth. Indian the textile sector is one of the four most labour-intensive sectors of the economy, along with construction, agriculture and tourism sectors. It has a huge potential for generating sustainable jobs as well as export earnings. Currently, it employs about 35 million people and contributes 12 per cent of exports. But just 15 years ago, the share of textiles and clothing in India’s manufacturing exports was more than 25 per cent.
India’s garment exports have now been overtaken in dollar terms even by its neighbour Bangladesh, and Vietnam may not be far behind. Of course, Bangladesh has benefitted from duty-free access to the European Union, and indeed some Indian entrepreneurs too have located themselves in that country for that reason. But Bangladesh’s transformation of its garment sector within a decade is nothing short of fantastic, offering some lessons for us as well.
Meanwhile, India has a unique opportunity to reverse the decline in its export share and seize a global leadership position. Some of this opportunity is arising due to changing labour dynamics in China, which has been the world’s textiles behemoth.
Textile a huge opportunity
Chief Economic Advisor (CEA) Arvind Subramanian has been championing the cause of this sector with compelling data. He points out most of the sustained East Asian growth of past decades was on the back of textile and clothing boom. Most tellingly, a unit of investment in the clothing sector generates 12 times as many jobs as the automobile sector and 30 times that of steel. Clearly, there is a big bang for the investment buck in textiles. Not surprisingly, the CEA’s passionate advocacy is showing results.
The recent reforms announced by the cabinet under a ‘textile package’ address some key impediments, and the package is timely. First, the reforms removed some of the embedded tax burden from exports through a duty drawback scheme. Secondly, firms are provided incentive to hire more workers through a subsidy to meet the EPF costs. But clearly much more needs to be done to harness the great promise. A CII-BCG study for textiles, made-ups and apparel estimates that the sector can generate 50 million jobs in the next nine years. Of these, more than 70 per cent will be for women. The study also shows that the shift of textiles and garments away from China is an annual opportunity of about 280 billion US dollars for other developing countries.
Advantage India
India has some advantages in being present in all parts of the value chain, beginning from fiber, yarn, fabric and going all the way to clothing, branded apparel and fashion. This is not to mention the new emerging markets like technical textiles that have industrial applications.
But here are two additional considerations that need close attention. First is the issue of fiber neutrality. In India, there is a curious frenemy relationship between cotton and man-made (synthetic) fibers. The global consumption pattern is 65:35 in favour of synthetics (like polyester, rayon, acrylic), whereas in India it is exactly the reverse. The net imports of the US and EU show a steady decline in cotton textiles vis-à-vis manmade fiber products over the past five years.
If India needs to tap into the export opportunity to these developed nations, our domestic mix has to mimic the global demand pattern. In India, cotton makes up 80 per cent of all fiber consumption whereas in China it is 50 per cent. This skew has been made worse due to the highly unequal excise tax treatment of cotton versus the rest. The textile ministry is aware of this asymmetry, and a fiber-neutral policy is on the anvil. Hopefully the GST regime will also discontinue the sharp asymmetry that has persisted for the past ten years.
FTAs, and their importance
Then there are the free trade agreements. Interestingly, the CEA himself is heading a committee to evaluate the costs and benefits of the several FTA that have been signed by India in the past couple of decades. Prima facie it appears that India’s trade deficit has uniformly gotten worse following several FTAs. No doubt, there has been trade enlargement, but not necessarily to India’s benefit. The reasons could be many – some fair, some unfair.
There is also the looming shadow of the mega treaty called the Trans Pacific Partnership which goes much beyond trade, and makes it compulsory for the entire value chain to be located in member countries. India is not a member of TPP and can potentially be at a serious disadvantage. Fortunately, the TPP is losing political support, so it may be several years into the future. Finally, despite these various hurdles, let us not lose sight of the huge promise of this sector (it is after all one of the trinity of roti, kapada, makaan), in generating large-scale jobs, especially for women, and healthy foreign exchange earnings. With proper policies and reforms, the textile sector in India is definitely heading for a high noon of great fortune.
