"The multi-million Indian knitwear industry, which faced the brunt of demonetisation and GST, is in doldrums today as many garment manufacturers are shifting their units from Tirupur to countries like Ethiopia and Sri Lanka that provide free access to major markets like the US and EU. The country offers excellent infrastructure to young entrepreneurs. It also has geographical advantage over others as the flying time from Coimbatore to Colombo is just 70 minutes. In the past six months alone, four well-known garment manufacturers, who excelled in the sector for decades, opened factories in Ethiopia."

The multi-million Indian knitwear industry, which faced the brunt of demonetisation and GST, is in doldrums today as many garment manufacturers are shifting their units from Tirupur to countries like Ethiopia and Sri Lanka that provide free access to major markets like the US and EU. The country offers excellent infrastructure to young entrepreneurs. It also has geographical advantage over others as the flying time from Coimbatore to Colombo is just 70 minutes. In the past six months alone, four well-known garment manufacturers, who excelled in the sector for decades, opened factories in Ethiopia.

Cheap labor, market access lures manufacturers abroad

Some major reasons why many manufacturers are opting to open units in foreign countries are: cheap labor, free market access to the EU and US, readily available infrastructure and absence of red-tape. The Indian industry, which was growing at over 10 per cent every year, has been reporting a 7 per cent dip since 2011, resulting in loss of a whopping Rs 2,000 crore ( US$ 0.27billion) . Exports, valued at Rs 26,000 crore ( US$ 3.54 billion) in 2016-2017, declined to Rs 24,000 crore ( US$ 3.27 billion) in 2017-2018 and domestic sales stood at around Rs 18,000 crore( US$ 2.45 billion) .

India does not offer free market access to EU and the US, which puts manufacturers in Tirupur at a disadvantageous position since entry tax is levied once goods reach the destination countries. Bangladesh and Sri Lanka, on the other hand, offer free access to the EU; Ethiopia also offers free access to both the EU and the US – thus attracting most of the buyers.

The labor cost in Tirupur is $150 to $200 (between Rs 11,000 to Rs 15,000) a week, while it is just $75 (Rs 6,000) in Ethiopia. Secondly, in India, separate labor is hired for stitching, packing, etc. Foreign countries, however, train their labor to multi-task, saving much more on the cost involved.

Plug and play model add to the attraction

The Ethiopian government keeps its infrastructure ready for garment manufacturers – all they have to do is to go with their machines, hire employees, train them and their factory is up and running. This plug and play model attracts manufacturers as they don’t have to go through the hassle of looking for land, constructing a building and get permissions. Everything is done by the government; all they have to do is to start our operations

R Rajkumar, Managing Director, Best Corporation, which launched operations in Hawassa, Ethiopia a couple of months ago, operates 500 machines in the country in two shifts. The company plans to increase capacity to 2,000 machines gradually. Santex Inc, which was also lured by the free market access that Sri Lanka offers to the EU, has opened a factory near Kandy in the country.

Indonesia will open more markets through numerous trade deals. It currently has signed trade deals with Pakistan, India, United States of America, Spain, Swiss, Tunisia, Bangladesh, Taiwan, New Zealand, and Morocco. The United States and the European Union are the main destinations for Indonesia’s textile exports. With such agreements in place Indonesia expects its exports of textile and textile products to increase three-fold.

The cooperation agreement with Japan has helped increase Indonesia’s exports. The country’s trade balance had experienced a surplus of $230 million throughout September 2018, a contrast to the previous month, which experienced a $1.02 billion deficit. The industry in Indonesia wants downstream products to be protected from the onslaught of imports.

Other aspects that need improvement include electricity tariffs, ease of distribution and quality of human resources. For Indonesia, trade agreements with partner countries can increase the export value and increase market share. Despite the export growth, Indonesia’s imports still exceed its exports.

Till now lack of market access has been a constraint for the textile industry. Meanwhile, textile products from neighboring countries, such as Vietnam, can enter with a zero per cent import duty.

At present, the market share of new domestic textile products is around 1.8 per cent while in Indonesia the textile industry has been integrated from upstream to downstream so that the potential for development is still large.

Large amounts of commodity chemicals used in the textile industry are contaminated with potentially hazardous substances that routinely end up in wastewater. Some of these substances are phthalates, chlorobenzene, toluene and other restricted chemicals.

Commonly used chemicals such as salts, soda ash, organic and inorganic acids, peroxide and caustic soda – which are often by-products of other industries – can be laced with potentially hazardous substances. The safety of specialty textile dyes, pigments and auxiliaries has long been under the microscope. Traded on the open market by dealers, and often repackaged under different trade names, these bulk commodity chemicals are often bought based on price only with price being directly related to the purity of the product.

Reports of a new potential huge source of hazardous contaminants in textile wastewater will come as a shock to many apparel brands and retailers. Identification of the problem could also help the textile sector to identify unknown sources of wastewater contaminants that have puzzled the industry for many years. Already, the development of a new screening tool for commodity chemicals is one positive outcome of this research, which aims to help textile mills make better informed decisions on the type of commodities they source.

Yarn Expo Autumn, held from Oct 15-17, 2018, featured over 500 exhibitors from 14 countries. The expo showcased a range of yarn & fiber products at the National Exhibition and Convention Center. The fair organised by Messe Frankfurt (HK) and the Sub-Council of Textile Industry, CCPIT, attracted leading industry players like: PT Indo-Rama, Chemtax, Shandong Ruyi, Jiangsu Shenghong and Jilin Chemical Fiber Group among others who use the fair as a platform to debut new products each year.

New companies included Safilin from France, that offered premium linen products developed through the brand’s extensive history, and Italy’s Sinterama Asia who showed their range of 1,200 diverse chemical fibers and end uses. Novetex Textiles from Hong Kong featured super soft merino in a wide range of colours, along with sustainable options in glen merino and 100 per cent lamb’s wool. Parkdale Mills from the US, the world’s leading manufacturer of spun yarns, showcased cotton varieties, such as open end fibres, ring spun, air jet and vortex, in different blends.

Sweden and the International Trade Centre will strengthen international competitiveness of textile and clothing producers in Egypt, Jordan, Morocco and Tunisia. The program will support the four countries to build sustainable export-oriented sectors with increased sales to traditional markets in Europe and North America along with new markets in sub-Saharan Africa.

Creating long-term and better-paid work, especially for women and young people, is a key goal of the project along with boosting exports, creating jobs and raising incomes across the Middle East and North African region. Another goal will be to strengthen regional economic integration among the four countries.

To achieve lasting improvements in the sector’s export competitiveness, the project will focus on bolstering the capacities of national institutions such as textile and clothing business associations and training centers to help better support local businesses. This will involve improving internal management processes and service portfolio development.

The project will also work directly with domestic enterprises, providing advisory services, training and coaching designed to help firms move up the value chain from cutting and sewing to fabric sourcing, product and design development and branding. The vast majority of products from Morocco and Tunisia go to the European Union, while Egypt’s and Jordan’s top export destination is the United States.

The three days long 6th India International Silk Fair (IISF) received a positive response. The over 100 exhibitors from across India got a good number of buyers. Organised by ISEPC, the fair was visited by over 145 buyers from across the world.

New and interesting products offered by some of the players were one of the reasons for the event to fetch more export orders. Socks, lingerie, undergarments, and umbrella made of Eri silk are a few of such products which witnessed increasing demand from overseas countries.

Apart from buyers interested in just silk, the event saw some other buyers who were interested in buying fabrics other than silk too who were flocking the stalls of exhibitors selling non-silk based products. L K Mishra, Janki Exports, Delhi and Ayan Sadh of Ayan Collection, Noida were some of the exhibitors in the fair who got good enquiries from the overseas buyers.

The American Apparel & Footwear Association (AAFA) and the Fair Labor Association have drawn up a program aimed at fair treatment of workers in the global apparel, footwear, and travel goods supply chain. The commitment is a proactive industry effort to address potential forced labor risks for migrant workers in the global supply chain.

More than a hundred apparel and footwear companies have signed the commitment. Each signatory commits to working with its partners to create conditions where no worker pays for their job; where workers retain control of their travel documents and have full freedom of movement; and workers are informed of the basic terms of their employment before joining the workforce.

The signing companies have also agreed to work to implement these practices, to incorporate the commitment into their social compliance standards by December 31, 2019, and to periodically report the company’s actions through sustainability and/or modern slavery legal disclosures.

Through this commitment the American Apparel & Footwear Association aims to show customers that it takes the issue of forced labor seriously and is proactively working together as an industry to initiate measures to ensure these values are respected throughout the supply chain.

Creating a more transparent supply chain has long been a focus of the apparel and footwear industry and removing the possibility of forced labor is a major part of these efforts.

Pakistan wants Japan and Canada to allow duty free access for its leather garments. Currently Japanese importers of leather garments have to pay a high duty rate for the import of leather garments from Pakistan. Previously these importers and brands were using China as their manufacturing base and Pakistan was shipping finished leather to China for conversion to leather products like jackets. However, with the rise of costs in China Japanese importers have been trying for the last two years to find another production base.

Pakistan is well suited to make value added finished jackets for the Japanese market, but due to duty free access from Vietnam, it is cheaper for Japanese customers to source Pakistani finished leather and get the garments made in Vietnam. Although the FOB price offered by Pakistani exporters for the same product is more competitive import duty costs are cheaper for the Japanese importer when working through Vietnam.

Duty free access to the Japanese and Canadian market would mean Pakistan would be able to deliver more competitive and shorter lead time deliveries to them. A preferential trade agreement would make it easier for value added Pakistani products to enter the Japanese and Canadian markets.

Lycra will set up an online aggregator next April to showcase products of all the apparel brands that use Lycra fibers, with links to the various partner brands’ e-tail sites. The aggregator will include only Lycra-based products whose brands will have given their consent.

Lycra currently has a site accessible by the general public, Lycra.com, as well as a B2B site. The idea is to start off by combining them, so that its business can be understood more clearly from the outside. The aggregator will offer two advantages for Lycra. On one hand, it will highlight, for the general public and young consumers in particular, the huge variety of products and brands using Lycra fibres, while at the same time strengthening Lycra’s brand image. On the other, through the aggregator, Lycra will be able to handle first-hand the communication of its brand name to end-consumers, something which Lycra-using brands don’t always manage well.

This eagerness to put the Lycra brand centre-stage coincides with a change of ownership for the Lycra Corporation. The A&AT (Apparel & Advanced Textiles) division of Invista, which owns Lycra, has been involved in an acquisition bid by giant Chinese textile group Shandong Ruyi for nearly a year.

Intimasia will be held in New Delhi from January 21 and 22, 2019. This is a trade fair for intimate wear. It will feature some of the industry’s most creative, path breaking and sought after brands, delegates and visitors from the industry, design teams and symposiums and fashion shows.

Intimate wear is currently the fastest growing sector of the garment trade. The event will offer retailers a platform to expand their reach to both suppliers and national and international level buyers, widening the reach and potential growth of their brand. For intimate wear brands Intimasia will offer them the chance to showcase their product, check and scope out potential partnerships and network with both manufacturers and raw materials suppliers.

New Delhi is surrounded by six major states and connected to 86 prime cities. It is one of India’s fastest growing cities. This growth is anchored by sturdy policy, focus, favorable geographical location and fashion forward citizens, infrastructure, economic climate and business investment perception.

Delhi’s fashion forward nature is a catalyst for the high growth rate in intimate wear segment. Attractive real estate and booming tourism are also drivers of surplus cash flow, boosting per capita income and considerably increasing the consumption capacity of its inhabitants. All this clearly means a greater purchasing power than most other regions in the country, justifying the demand and consumption of designer intimate wear.