FW
"Though majority of the industry leaders believe trade agreements (FTAs) are not beneficial for Indian economy, a new research policy paper by former commerce secretary Rajeev Kher and Ram Upendra Das, Head of Centre for Regional Trade, an autonomous body promoted by the commerce ministry, offers a contrary view. The research paper reviews the most comprehensive of the 16 free trade agreements including the India-Singapore Comprehensive Economic Cooperation Agreement (CECA), India-ASEAN Trade in Goods Agreement, India-Japan Comprehensive Economic Partnership Agreement"
Though majority of the industry leaders believe trade agreements (FTAs) are not beneficial for Indian economy, a new research policy paper by former commerce secretary Rajeev Kher and Ram Upendra Das, Head of Centre for Regional Trade, an autonomous body promoted by the commerce ministry, offers a contrary view. The research paper reviews the most comprehensive of the 16 free trade agreements including the India-Singapore Comprehensive Economic Cooperation Agreement (CECA), India-ASEAN Trade in Goods Agreement, India-Japan Comprehensive Economic Partnership Agreement , India-South Korea Comprehensive Economic Partnership Agreement (CEPA), India-Malaysia Comprehensive Economic Cooperation Agreement (CECA). It acknowledges that Indian imports have increased at a greater pace than its exports however, this growth should be viewed in proportion to total trade in both pre-FTA and post FTA scenario.
The paper helps the commerce ministry to make an informed decision on India’s participation in the RCEP. It
assumes a special significance as India is actively engaged with not only the ten member states of the ASEAN and its six FTA partners - China, Japan, India, South Korea, Australia and New Zealand.
Declining trade deficit between India and ASEAN
Among the five FTAs that were considered, India was most engaged with the ASEAN in size of total trade ($81 billion) and the size of trade deficit ($12.9 billion). In ASEAN’s case, increase in its trade deficit was the least compared to other FTA partners during 2009-18. The country’s trade deficit to the total trade ratio vis-a-vis ASEAN decreased from -17.4 per cent in 2009 to -15.9 per cent in 2018. This is due to the fact that its total trade between India and ASEAN in the post-FTA period compared to the pre-FTA period, the increase in trade deficit is lower, hence the trade deficit to total trade ratio has declined.
The paper also highlights India's exports to all FTA partners primarily comprise non-raw material goods and constitute 78-96 per cent of the total materials. On the other hand, it imports primarily account for non-consumer goods. For ASEAN non-consumer goods was 84 per cent of total import. This can be an ideal export and import structure for India and FTA partners.
Need for better trade statistics
The paper also emphasises on the need for better trade statistics in services as lack of data hampers negotiations on trade in services. It recommends the development of a better understanding of trading, measurement and regulation of services in order to establish India as a major services exporter to take fuller benefits of FTAs. It also recommends a shift in India's engagements from geo-politics to geo-economics and studying FTAs on the basis of reciprocal benefits and employment generation potential rather than from a solely export perspective.
Mizoram's Tawlhlohpuan and Mizo Puanchei shawl or wraparound, the most exquisite and intricately designed handwoven textile, has received Geographical Indication (GI) tag under the Government of India's Department for promotion of industry and internal trade.
The 'Geographical Indication' tag is an indication used on products that have a specific geographical origin and possess qualities or a reputation that are due to the origin. Such a tag conveys an assurance of quality and distinctiveness which is attributed to its origin.
The GI tag is like a boon for the weavers of the state as it will provide a platform to their products in the international market, ensuring better income for them.
Tawlhlohpuan is a medium-to-heavy, compactly woven, good quality fabric from Mizoram. It is known for warp yarns, warping, weaving and intricate designs that are made by hand. The fabric, which holds high significance in the Mizo society, is produced all across the state, with Aizawl and Thenzawl being the important production centres.
On the other hand, Mizo Puanchei is a colourful Mizo shawl, which is considered as the most colourful among the Mizo handloom products. It is an essential possession for every Mizo lady and an important marriage outfit in the state.
To weave this beautiful shawl, weavers insert designs by using supplementary yarns. At present, Puanchei is sold at Rs 1,800 per piece and Tawlhlohpuan at Rs 450 per piece respectively.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has been assigned the task of sewing the world’s largest T-shirt using cotton fabric to break the Guinness record, marking the centenary of founding anniversary of the International Labour Organization (ILO). Bangladeshi apparel manufacturer Palmal has been entrusted with sewing of the 350 ft. long and 250-ft. wide T-shirt using cotton fabrics, which will be one-size larger than the Indian-made T-shirt. Palmal will bear the cost of sewing the r-shirt and so logo of the company would be adorned with it. The T-shirt would be made into 500 to 1,000 pieces, after the celebration, and the money to be received from sale would be handed over to the labour-welfare fund.
Meanwhile, the BGMEA leaders have taken various initiatives to boost RMG export including digilisation of all RMG factories, boosting export and establishing on ‘RMG Sustainability Council’ (RSC). The proposal for forming RMG Sustainability Council’ (RSC) gets acceptability to all. The BGMEA wants to establish on ‘RMG Sustainability Council’ (RSC) to ensure full and independent national compliance monitoring system in Bangladesh. The RSC will be governed by BGMEA, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), brands, and workers’ representatives. It will take over all the safety-related matters in the RMG industry within the legal framework of the government of Bangladesh.
Primark’s first-half operating margin was 11.7 per cent. This beats last year’s 9.8 per cent as a weaker US dollar, better buying and tight stock management all helped. Primark’s full-year sales are expected to be five per cent ahead of last year, with particularly strong sales growth in Spain, France, Italy and Belgium.
Primark is one of the strongest names in value-focused fashion. Q4 sales growth has been faster than in the previous nine months of the financial year due to an improving like-for-like performance. Primark performed well in the UK even though the country’s fashion market has been weak. Its new store in Birmingham High Street showcases its full product range and new food and beverage and beauty services. The group continued to deliver a significant gain in market share, with sales growth of three per cent and a like-for-like sales decline of one per cent.
The contribution from its new European stores exceeded its expectations. But eurozone like-for-like sales fell by three per cent with a weak performance in Germany. While the American business remains loss-making, the firm’s increased sales and the lower operating costs due to the selling space reduction in three stores will result in a significantly reduced US operating loss.
Considering the local market size, Bangladesh’s leading readymade garment exporters are operating their business with the assistance of reputed global brands including H&M, Walmart, Zara, Next, Primark C&A, etc. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says more than 50 local RMG manufacturing companies are producing dresses for domestic markets. The BGMEA data also estimated the country’s domestic market size of apparel products at around Tk 250 billion where the local brands could avail less than 25 per cent share.
Local brands are getting good response from the customers. At the same time, consumers are embracing new trends. The customers are getting western and tradition culture with local brand. Due to quality products locally made brand cloths are gaining popularity in the domestic fashion industry as youths are attracting largely.
Country’s leading garment exporters including Beximco, Standard Group, Epyllion Group, Sonotex Group, Giant Group of Companies, Evince Group, Saasco group, East-West Industrial Park, Babylon Group and Millon Clothings have been making their own clothing brands.
Beximco Textiles has decided to spread its wings on the domestic market with Yellow brand. This initiative will bring a positive impact on the country’s economy. Its brand “Sailer” already serves the country’s middle-class people. It has been receiving good response from consumers so far.
China has been pressuring western brands to apologise for perceived slights against its territorial integrity and/or for support for Hong Kong protestors — a trend that has already affected the likes of Givenchy, Coach, and Calvin Klein. In fact, Spanish fashion giant Inditex — the world’s largest retailer, selling in 200 markets via its online platform and 96 markets through 7,400 brick-and-mortar stores issued a public apology to distance itself from the Hong Kong protests and ensure its business won’t be frozen out in China.
This came on the heels of the unprecedented pressure China put on Cathay Pacific to publicly apologise for staff that were involved with the Hong Kong protests, which eventually led to the resignation of the company’s CEO and sent a message to the world that business will have to recognize the “one-China” policy or be punished. The world was waiting to see how long it would take for the Mainland to apply its brute influence across foreign businesses operating in China, and the response was fast.
On September 2, the Inditex-owned fast-fashion brand ZARA closed some stores in Hong Kong. Although it hasn’t been unusual for stores to close or change operating hours during the Hong Kong protests due to unsafe working conditions, staff taking leave to participate in demonstrations, or lack of customer turn-out, the Global Times nevertheless took the opportunity to call out the fashion giant.
Widely recognised as the noisy mouthpiece of the Communist Party of China, the paper published an editorial piece on September 1, entitled, Zara faces Chinese boycott after suspected support for the strike in HK, which accused the brand of closing its stores in support of the Hong Kong protests.
Inditex aims at being a pure player by 2020. In the second quarter, Inditex sales are expected to be up eight per cent, though demand is dropping. The first quarter was the most profitable for Inditex since 2013. Sales moderately rose by 4.8 per cent compared to the 4.5 per cent of the fourth quarter of 2018.
Inditex is one of the best positioned in the market, and at the same time it continues to sell through its stores and its online channel. The political instability may not affect the group. Despite this, the Spanish giant is not excluded from the currency effect that could probably erode its margins in the second quarter. Inditex still swims in turbulent waters, with the shade of a recession in several European counties, a weakened consumption and retail in a transformation phase.
Meanwhile competitor H&M closed its second quarter with a rise of 11 per cent in sales. Gap’s sales in the same quarter fell by four per cent. And sales at Fast Retailing fell by 7.3 per cent. Gap is in the middle of a restructuring. Fast Retailing is undertaking international expansion and H&M has started embracing digitalization after two consecutive fiscal years with disappointing results.
US blue denim apparel imports from China fell 11.01 per cent in this year till July. The drop is dramatic compared to overall apparel imports from China in the same period, which were up 2.33 per cent.
Most of US blue denim apparel imports are jeans. US denim apparel importers are reducing their exposure to China tariffs through a combination of partnering with vendors and diversifying their geographic production capabilities. They are reducing the percentage of their total apparel production which comes from China and reducing their dependency on China.
China’s jeans market share came down to 22.48 per cent, just a tick above Mexico’s 22.27 per cent. For the first seven months of the year, jeans imports from Mexico grew 12.53 per cent in value, topping China’s shipments so far this year. This was notably in contrast to Mexico’s overall apparel shipments in the period, which were down 2.94 per cent. Among the suppliers gaining ground this year from Asia was Vietnam, with imports to the US up 30.24 per cent, and Pakistan, with shipments rising 8.72 per cent. But imports from Bangladesh were down 1.51 per cent. Shipments from Cambodia declined 9.48 per cent and those Indonesia dropped 13.89 per cent.
Unifi sales are up 7.6 per cent over the prior year.
This US company recycles PET into the brand fiber Repreve. But profits have fallen due to the significant competition from textured yarns imported into the US, unfavorable currency exchange rates, volatile feedstock costs and a higher effective tax rate.
Flake is produced at its PET bottle recycling facility. The site has a capacity of up to 75 million pounds per year. Unifi both sells the flake externally and sends it to the Repreve recycling center, where it’s processed into chips. The chips are both sold externally and converted by Unifi into Repreve yarn. Companies making outdoor wear, backpacks, socks or T-shirts use Repreve.
Unifi has production facilities in the US, Colombia and Brazil. It has sales offices in a number of locations in the Americas and Asia. The company has invested in capital projects, including improving production capabilities and technology enhancements in the Americas as well as annual maintenance work. There will be further production enhancements in the Americas, including purchasing Evo texturing machines. The machines, which can process Repreve recycled polyester, operate at higher texturing speeds than existing equipment, make a broad range of products and enable the production of new performance yarns.
Textile waste has increased by a massive 811 per cent from 1960 to 2015, says Retail Dive. The majority of this waste, approximately 66 per cent, is being dumped in landfills. Plastics show the largest increase in waste since 1960, a colossal 8,746 per cent. Rubber and leather, common materials used in footwear and clothing, have also shown a significant increase at 361 per cent.
Across the globe consumers now purchase more than 80 billion pieces of new clothing each year, with an increasing amount ending up in landfills. Companies want to be seen as being environmentally responsible. It’s about reducing waste during textile production and reusing or recycling waste to produce other products. Rugs and outdoor fabrics, for instance, are increasingly being made with recycled materials instead of new plastics. Fashion design students are experimenting using milkweed and flax to create luxurious fur from 100 per cent plant material. Another student design team has come up with the idea for a spandex-type elastic fabric using a protein found in oysters. An exhibit of textile innovations in the US included a dress made by a Japanese design team that features naturally glowing silk, made from silkworms injected with a green fluorescent protein derived from jellyfish.
