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Cheap imports from other countries are coming to India via Bangladesh. Now checks are being done to ensure only Bangladesh origin imports enter Indi. Origin certificates issued for such consignments by Bangladesh trade bodies will be carefully examined. India offers duty concessions to Bangladesh under a free trade pact. A close watch will be kept on garment imports under the South Asian Free Trade Area agreement entering the country via Bangladesh. Such imports using the FTA route without any value addition don’t just defeat the whole objective of the agreement but also hurt the Make in India initiative.
The South Asian Free Trade Agreement mandates 30 per cent local value addition in least developed countries for import by other nations. Local value addition norms are incorporated in the trade pacts to not just protect the importing partner but also to ensure contribution to the exporting partner’s economy and local job creation through stringent value addition criterion.
A show-cause notice was issued in early August to Future Enterprises on 83 garment consignments, allegedly imported from third countries and routed via Bangladesh to take advantage of zero import duty. The fear is that the route could be abused by other importers.
Bangladesh readymade garment manufacturers received a good number of orders at Apparel Textile Sourcing Canada, August 19 to 21, 2019. A total of 10 fabric, garment and home textile manufacturers from Bangladesh took part in the trade show. For enlarging the trade volume in the Canadian market, Bangladesh showcased its products especially leather and diversified jute products. One company, Hand Touch, displayed embroidered handmade fashionable garments which attracted buyers. The company made some good contacts which will be soon turned into visible export orders.
Bangladesh’s textile products enjoy duty-free access to Canada. If the trade facilities offered by Canada remain unchanged, Bangladesh’s exports to Canada will reach $3 billion by 2021. Bangladesh has set a target of doing $50 billion in overseas sales by the end of 2021 and Canada is going to be a key garment export destination. Bangladesh and Canada may form a blue ribbon panel to explore possibilities of expanding trade and investment. The signing of a bilateral investment treaty between the two countries would go a long way toward increasing foreign direct investment from Canada to Bangladesh.
Canada is a country of some 37 million people, with French and English as official languages. It is a leading as well as growing trading partner of Bangladesh, providing export opportunities.
The UK wants Bangladesh to take measures for ensuring a level playing field for both export processing zone factories and local producing units. Currently, Bangladesh apparel exporters enjoy a four per cent cash incentive against exports to non-traditional export destinations i.e. countries outside the EU, the US and Canada. Currently, four readymade garment sectors receive export incentives at four per cent. But foreign-owned clothing factories operating inside export processing zones are not eligible to enjoy such incentives. This is felt to be unfair since foreign firms operating in the readymade garment sector feel they contribute to job creation, skills training and tax revenues. So the UK wants such incentives to be provided for export processing zone factories too.
Bangladesh is planning to introduce a rebate of one per cent on all readymade garment exports. However, only Type C companies (100 per cent Bangladesh owned and resident in Bangladesh) within the export processing zones are entitled to get this incentive. British companies are upset the proposed one per cent export rebate in the current budget will exclude them.
This fiscal Bangladesh’s export earnings from the UK grew 4.51 per cent against an 11.76 per cent growth last fiscal year.
Japanese designers are redefining the concept of fashion. In 2012, Yoshikazu Yamagata held fashion shows without clothes. This was meant as a blow to the idea that the world revolves around a designer’s clothes and instead focus on a world that incidentally includes fashion. This marks a cultural shift that reflects that only a handful of people actually wear haute couture gowns that are currently regarded as real fashion. Isetan Shinjuku’s petite section is holding an event aimed at women 150 centimeters tall and below. The highlight of the Isetan line-up is a seven-way dress that can be styled seven different ways and acknowledges the differences in dressing the shorter woman’s body. Ikebukuro Seibu makes washable period-proof underwear. The intent is to change the view of menstruation and the use of disposable sanitary products.
Brands are increasingly relying on external creative forces to make something new. Artists are a welcome guest in the designer’s world. Michael Kors’ bags sport Masami Yanagida illustrations. With the fashion industry’s relentless use of collaborations to court attention, designers are being asked to bring someone else’s world to life rather than their own. Issues like inclusivity and social change have started to fall into the hands of brands with real consciences.
A quarter of Chinese production capacity used by global sportswear brands is lying idle. International brands are shifting sourcing overseas, which results in unoccupied production capacity. The protracted trade war with the US is pushing the biggest sports labels out of the Asian nation’s factories.
The idle capacity in a country that’s long been the workshop to the world underscores the blow of the trade war to Chinese manufacturers, who are also grappling with an economy that’s expanding at its slowest pace in three decades. There are growing signs that the global supply chain that’s been in place for decades -- and powered by China’s economic rise -- is being permanently transformed. The world’s largest supplier of consumer goods, Li & Fung, is helping its clients, which include the biggest retailers in the world, move sourcing away from China to other regions. For instance, it assisted one American retailer reduce its reliance on China from 70 per cent to 20 per cent within two years.
However, for China’s industry of sportswear exports, the growing local market can partially make up for waning foreign demand. By shifting to made-in-China and sold-in-China, factories can shorten production cycles and that could be good for them.
Euro A Zipper is coming to India through an agreement with Kolkata-based Bagaria Trading. With this agreement, the zipper brand forays into the rapidly-growing Indian market with an intent to seize a sizeable chunk of the leather and leather apparel segment. Through this partnership Bagaria aims at introducing international standards in the use of zippers in leather and apparel industries. The partnership is also expected to create an immediate upside for West Bengal’s economy, allow for specific skill development and expertise and in turn create employment in the region. Bagaria Trading will have the sole right of Euro A Zipper’s pan-India franchise and will be responsible for sourcing all Euro A Zipper’s OBO brand products from the company’s manufacturing facilities in China and Bangladesh and handle the entire marketing, sales and distribution in India. Euro A Zipper wants to eventually set up distribution centers in India. Bagaria Trading will be in charge of the entire logistics. Euro A Zipper and Bagaria Trading also plan to set up an assembly plant in the next two years.
If everything works out as planned, and once Euro A Zipper has established its presence properly in India, it may look to extend its partnership to penetrate the domestic markets of neighboring countries like Bangladesh, Sri Lanka and Nepal.
The government has announced measures to infuse confidence in small and medium units in the garment hub and for boosting industrial demand. Banks will come out with an improved and transparent OTS policy to benefit medium and small units and retail borrowers in settling their overdues and will pass on the rate cuts through MCLR reduction to benefit all borrowers. This will be a great relief to the financially stressed Tirupur knitwear garment exporting units in the small and medium sector.
As for NPA classification norms, the industry has appealed to a revert to the Two Quarter Past Due concept of 180 days instead of the 90 days prevailing now in the case of small and medium units as it will provide some breathing time for the units to recover and recoup. The opinion is that an enough and adequate monitoring mechanism may be implemented even if the overdue crosses 90 days to avoid any siphoning off such as happens in many big corporate cases. The industry requests for restructuring two times to have a leverage, after considering the seasonal nature of the business.
The rebate on state and central taxes and levies was announced on March 7, 2019, for the garment sector to reimburse the embedded taxes and levies not covered under GST.
The small and medium sector will receive GST refunds within 30 days. However, powerloom weavers are not satisfied and want revocation of the amended notification on GST refund lapse issued in 2017. They say their blocked accumulated input tax credit (ITC) should be released in full. A notification was on June 25, 2017, restricting refund of accumulated input tax credit in case of manufacturers of various qualities of grey fabrics, who otherwise were eligible for refund under GST. After representation by weavers, the notification was amended on June 28, 2017, allowing refund from August 1, 2018, but with condition that all the accumulated ITC up to July 31, 2018 will lapse. This was recently set aside by the high court.
The powerloom industry wants the earlier notification by which ITC refund lapses, to be revoked and feels this will help it get the full pending refund of Rs 1,400 crores to boost modernization in the industry. Medium and small units in the textile sector are the backbone of the textile industry. Release of ITC refunds within 30 days is a bold decision.
India has announced a slew of measures to boost the textile sector of the Indian economy.
Pakistan’s cost-competitive garment makers are drawing attention from multinational brands, which are looking to expand their supplier base. Globally competitive Pakistani exporters remain few and far between. The economy still centers around production of cotton, a commodity, while manufacturers have been slow to embrace automation. But those that have gained a global foothold may benefit from the country's depreciating currency -- the rupee has lost a third of its value in the last two years, which makes Pakistan exports cheaper.
Chinese garment makers looking to export to the West are attracted to Pakistan, which has duty-free access to many western markets due to its status as a less developed economy. In addition to bringing in investment, China’s overtures have also led to an influx of Chinese business people and workers, particularly on construction projects. Whereas westerners doing business in Pakistan tend to stay only a few days at a time, the Chinese have more often settled in and become a part of local communities.
Pakistan garment companies are fighting hard to break into the supply chains of some of the world's biggest fashion brands as the country races to catch up with Bangladesh and other Asian apparel heavyweights. Terror continues to haunt the neighborhood.
Teemill is a garment production company which uses certified organic cotton and plastic-free packaging. Teemill uses renewable energy throughout the supply chain and makes new T-shirts out of old ones. The cotton used is grown in northern India, where co-planting and insect-traps take the place of harmful fertilisers and pesticides. The water for the cotton comes from local reservoirs filled throughout the monsoon season, and the farmers are given a guaranteed price for their produce. In the renewable energy-run factory, water - usually a major effluent in the fashion business - is filtered and cleaned in order to be used again, while any excess cotton material is re-manufactured to be used for new products so nothing goes to waste. Even the packaging for the tee is 100 per cent biodegradable. from and lives in Garstang. A circular production model has been implemented in the latest collection.
From hummingbirds, deer, and polar bears to cassette tapes, Mt. Fuji, and dream-catchers, the designs are bold and intricate, often featuring motifs promoting veganism and environmentalism.
The fashion industry creates more CO2 than aviation and shipping combined. It's also directly responsible for 35 per cent of the microplastics found in the ocean, and is built on cheap labor and a deeply ugly throwaway culture.
