FW
India and the European Union are trying to re-start the Free Trade Agreement negotiations. The discussions, formally called the Broad-based Trade and Investment Agreement (BTIA), were officially kicked off in 2007 but saw several ups and downs with disagreements over market access issues.
In 2013, they reached a complete standstill as the EU was unhappy with India’s offers for items such as wines and spirits and automobiles as well as financial services and retail. India, on its part, wanted more market access for key manufacturing items, grant of data secure status that would bring more off-shore business to its companies and greater flexibility in H1-B visa rules.
However, this time things could be different. The EU, and to some extent India, have been on the receiving side of the abrasive trade measures of the US. Hard positions may see some softening. The Indian industry, especially textiles and garments sector, is eager to formalise the BTIA with the EU soon as competitors like Bangladesh and Vietnam enjoy preferential tariffs in the region. Two-way trade between India and the EU is well balanced. The EU accounts for about 17 per cent of India’s total exports.
Planet Textiles will be held in Canada on May 22. The event will focus on deforestation where key industry figures look at the challenges facing the man-made cellulosic textile sector in terms of forestry management, climate change and biodiversity.
The major aim of the event is to share new environmental innovations and business models, and to show how new technologies and financial innovations can increase collaboration and transparency in the industry. Sessions will be conducted on financial models and mechanisms, real-world examples and original case studies of textile companies that have already managed to scale up sustainability, how they have successfully applied new investment to grow and what true investment costs actually look like.
Canada is home to 10 per cent of the world’s forested land. Over 120 million trees a year are logged for use in clothing made from fibers such as viscose and lyocell. Many of these garments are made from wood sourced in endangered forests, creating a huge threat to critical eco-systems, habitats and planetary biodiversity.
One of the main aims of the event is to provide actionable ideas that can be taken and implemented within respective companies. This will include what the next steps should be and how brands can tackle this issue more effectively by selecting the right partners.
Cotton made in Africa (CmiA) was founded in 2005 as a social business to protect the environment and support smallholder farmers and their families in sub-Saharan Africa. Cotton made in Africa cooperates with more than one million cotton farmers, 17 per cent of whom are women. Besides farmers, more than 11,000 factory workers in the African cotton processing industry are part of the initiative.
The label for sustainable cotton stands for environmental protection and training in sustainable and modern cotton cultivation. The training enables smallholder farmers to improve their working and living conditions through their own efforts. In addition, CmiA certifies the work in ginneries, the first step in the processing of cotton. In 2017 a record 90 million textiles, bore the CmiA label. This is a 79 per cent increase compared to previous year.
For each textile wearing the CmiA certificate, a license fee flows back into the project areas. Instead of transferring donations, the initiative has thus chosen a market approach. A total of 36 companies and brands currently order CmiA cotton. Smaller fair fashion brands also use CmiA certified cotton to set an example in the industry.
The digital textile printing market is expected to grow at a CAGR of 5.59 per cent between 2018 and 2023. Growing demand for sustainable printing, increasing demand for digital textile printing in the garment and advertising industries, shortening lifespan and faster adaptability of fashion designs, development of new technologies in the textile industry, reduced per unit cost of printing with digital printers and growth of the e-commerce industry are the major factors driving the market.
The global digital textile printing market for roll to roll printing process held the largest share in 2017. More than 70 per cent of the total digital textile printing market was dominated by the roll to roll printing process. Roll to roll digital printers are majorly used in textile and decor, soft signage, and industrial applications. The major applications in textile and decor are home textile, upholstery, linens, drapery, ties, sportswear, footwear, clothes, interior decor etc.
The market for direct to garment application is expected to grow significantly during the forecast period. Fast moving fashion cycles, cost advantage on short run cycles, creative designs, quick time to market for new trends, reduced waste, and low power consumption are some of the major factors to drive the market for direct to garment applications.
Factory closures are commonplace in the global garment industry. They are often preceded by major buyers cutting off orders, without warning or explanation to the workers, most of them women. The consequences for workers and their families in each case are dire. Clean Clothes Campaign believes to deny these workers payment is tantamount to wage theft and calls on all brands involved to ensure workers receive what they are owed.
International standards, like the UN Guiding Principles on Business and Human Rights, are crystal clear – brands retain full responsibility for their supply chains. Yet, big brands continue to deny their responsibility and offer voluntary hardship payments that leave workers locked out of the negotiating table and dependent on these handouts.
Multinational enterprises are expected to assess the risk that any withdrawal of business may have to ongoing operations of their supplier, and attempt to address potential negative aspects prior to withdrawal. The widespread problem of factory closures and resulting wage and severance theft has been placed firmly on the agenda of the media and investors. This is an issue which affects thousands of garment workers worldwide and demonstrates the power and importance of solidarity between workers and consumers alike.
The global silk market is projected to grow at a CAGR of 7.6 per cent from 2017 to 2025. Growth can be attributed to technological advancements in sericulture, which directly increases silk yield. Moreover silk is a low capital investment industry in terms of technology and labor.
Though demand for silk products is growing in Europe and North America, the Asia-Pacific region is the largest market for silk. It has a large number of textile manufacturers and growing demand from the domestic market. China dominates the silk market in the Asia-Pacific region followed by India. Raw silk is easily available in the two countries. China is the largest producer of silk yarn and textile products. The Asia-Pacific region remains the fastest growing market for silk in terms of value and volume.
Based on type, mulberry silk segment is projected to lead the market. Owing to its high strength, durability, and flexibility, mulberry silk is used in the production of textiles such as apparel, wedding dresses, gowns etc as well as in interiors such as pillows, wall hangings, and upholstery. The growing textile industry in the Asia-Pacific region is driving the demand for mulberry silk in the region.
India’s apparel production fell 4.7 per cent in February. This is the tenth straight monthly decline in apparel production. Several unresolved issues like the reduction in duty drawback and RoSL after the imposition of GST, capital blockage due to slow GST refunds and uncertainties on the future of export subsidies have affected industry sentiments. Speaking about the decline in production, HKL Magu, Chairman, Apparel Export Promotion Council (AEPC) says, “Apparel manufacturing is clearly in recession as the latest production figures shows a decline of 4.7 per cent in apparel production.”
Global demand positions are good and the industry is keen to take up more orders but cost disadvantages are affecting India's relative position as a sourcing destination. IIP stats reveal there has been a month to month decline in apparel productivity. From positive growth of 1.3 per cent in April 2017, May saw a fall of five per cent. In June, the decline was 3.2 per cent while in July, it was 5.1 per cent. In August, September, October, November and December the industry recorded a decline of 6.4 per cent, 7.2 per cent, 11 per cent, 13.1 per cent and 13.5 per cent respectively. In January, apparel production recorded a dip of 10.7 per cent.
For April-February 2017-18 the decline has been 9.9 per cent. Business is there but buyers want fast track suppliers. Fast fashion dictates trends. Indian exporters don’t have a great infrastructure and most can’t supply in a short span of time.
Alliance has decided to look for a way to carry forward its inspections, safety monitoring, training and helpline services in Bangladesh. Its five-year-term draws to a close at the end of the year. Now, it’s discussing plans to form a successor safety monitoring organization (SMO). This will be an independent, credible, locally-led organisation that will continue Alliance’s work.
Initially, the plan was to place Alliance’s work in the hands of local stakeholders like the BGMEA (Bangladesh Garment Manufacturers and Exporters Association) and trade unions. But this seems to have changed now.
Alliance is a factory inspection platform of 28 North American retailers. Since its founding in July 2013, Alliance claims to have effected a sea change on safety within Alliance-affiliated factories. According to the organisation, remediation across more than 600 factories is 90 per cent complete and 1.4 million workers in nearly 1,000 factories have access to the 24-hour Alliance helpline.
In addition, 1.5 million workers have been trained in fire safety and democratically elected Worker Safety Committees have been established in nearly 200 factories. Fortifying safety in factories and equipping workers with empowerment tools is Alliance’s focus. Safe garment factories protect millions of workers and they are critical to maintaining Bangladesh’s standing as a world leader in garment production.
"Pakistan has always been a major textile market for India and the Asian region. Even after decades of political unrest, India is the 4th largest source for Pakistan’s total merchandised imports and second largest for textiles and clothing. Among Pakistan’s overall imports from India textile and clothing takes a major share of 23.6 per cent and accounts for 12.5 per cent of total textiles and clothing imported in the country. Textile industry is the largest manufacturing activity in Pakistan making it the 8th largest exporter of textiles in Asia. It contribute 8.5 per cent to Pakistan’s GDP and employs about 45 per cent of the total labour force in the country (and 38 per cent of manufacturing workers)."
Pakistan has always been a major textile market for India and the Asian region. Even after decades of political unrest, India is the 4th largest source for Pakistan’s total merchandised imports and second largest for textiles and clothing. Among Pakistan’s overall imports from India textile and clothing takes a major share of 23.6 per cent and accounts for 12.5 per cent of total textiles and clothing imported in the country. Textile industry is the largest manufacturing activity in Pakistan making it the 8th largest exporter of textiles in Asia. It contribute 8.5 per cent to Pakistan’s GDP and employs about 45 per cent of the total labour force in the country (and 38 per cent of manufacturing workers). Pakistan is the 4th largest producer of cotton in the world and has the third largest spinning capacity in Asia after China and India. In spinning, Pakistan contributes 5 per cent to the global capacity. Besides, there are 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units which produce textile.
India-Pak EXIM relations
Pakistan, has to its kitty, more than 6 per cent of India’s export as far as textile fibres and yarns are concerned. It is also the third largest exporter of cotton fibre and yarns, 10th for other spun yarns, 9th for man-made fibres and 34th for filament yarns. Pakistan is among the top 10 markets for basic textiles exported from India. On a monthly basis, fibre (including cotton) export to Pakistan averages $24.5 million, spun yarns $12.3 million and filaments $0.4 million. Pakistan is also sixth largest market of Indian viscose staple fibre. On an average 6.7 lakh kgs of VSF is exported worth US$1.35 million. However, the volume is not stable with maximum shipment recorded in the past two year is 1.7 million kgs (January 2017) and minimum of 60 thousand kgs (February 2018). Only on four occasions the volumes have crossed 1 million kgs in last 24 months.
As for imports, in fibre, Pakistan majorly imports cotton ($23 million a month) and viscose staple fibre ($1.3 million a month). In spun yarn, the single major is cotton yarn at an average of $11.1 million a month, followed by $0.6 million worth of polyester/viscose yarn and $0.3 million of polyester yarn. In the first five month of 2017-18 marketing season, cotton export to Pakistan totalled 7.7 lakh bales worth $238 million as against 6.9 lakh bales in the corresponding months of 2016-17. There was no shipment reported in October.
Pitfalls on the way
Textile accounts for 57 per cent of export revenues, but there has been significant decline in recent years. The Pakistan Textile Exporters Association has urged the government to take measures to ensure textile exports grow and sustain employment. Further, the Pakistan Textile Mills Association has demanded removal of duty on cotton imports and a rebate of five percent on textile exports. This plea has come at a time when about 110 mills were shut down due to various barriers to growth including the energy shortage.
Although cotton is the largest fibre, the industry is persistently facing a shortage of white fibre, which has hurt textile sector’s growth. There have been frequent crop failures which impede investments and expansion of textile industry, despite it is the largest generator of employment in the country. The spinning activity is still limited to coarser or regular count yarns and has miniscule ability to produce finer count yarns. The recent sharp depreciation in the PakRe, has made export cheaper, but it also made raw material imports costlier. However, with home grown cotton, textile industry has seen significant benefits of currency depreciation.
There has been growing awareness about sustainability among UK retailers, reveals a new research from WGSN. They are interested in addressing modern slavery, inequality and climate change, and encouraging sustainable economic growth and responsible consumption and production.
There is an emerging shift towards long-term sustainable retail systems rather than short-term sustainable product lines. In fact, there is 128 per cent increase in the number of sustainable women’s wear products online in the UK.
Fitness and swimwear saw the largest jump in volumes of new sustainable products, rising by 40 per cent, lingerie and sleepwear rose 39 per cent, jeans rose 28 per cent, shirts and tops went up 18 per cent and knitwear went up 16 per cent. Volumes for sustainable dresses dropped by six per cent, trousers 30 per cent and coats and jackets by 33 per cent year-on-year.
Gains in women’s wear were not reflected in men’s fashion, however, which recorded flat volumes of new sustainable products year-on-year. However, new products that were out of stock but still appear on retailers’ websites grew by 4.9 percentage points last year, signaling demand and significant scope for exploration in men’s wear. With discretionary spending continuing to dip, consumers need more than sustainability to encourage a purchase, such as newness and value for money.
