14 February 2023, Mumbai

The history of spinning and weaving in Pakistan comes from the Harappa culture, which was there four thousand years ago. Since then, Pakistan has continued this long-standing custom and grown to rank as Asia's eighth-largest exporter of textile goods.

The nation has the highest spinning capacity in Asia and is the third-largest cotton producer after China and India. Pakistan has 442 spinning mills, 1260 ginning facilities, 2550 garment manufacturing businesses, and 600 knitwear manufacturing businesses.

Scope

To be sold to nations including the United States, Hong Kong, United Kingdom, Germany, Italy, France, Netherlands, Dubai, and Afghanistan, textile items like carpets, rugs, towels, tents, home textiles, hosiery, and garments are created in this region. The textile industry firmly supports Pakistan's economy. Nearly 50% of all overseas exports are made up of textile goods and clothing, which also provide 8.5% of the nation's GDP and employ 38% of the labor force in manufacturing.

The way things are

Regarding acquiring and utilizing raw materials, Pakistan's spinning industry operates in a competitive yet unrestricted environment. The lack of crops has hampered Pakistan's sourcing of foreign cotton since it started a decade ago. The country imports over 3 million bales from outside while producing close to 11.5 million locally.

Role of FTAs & GSP

Pakistan benefits from a free trade agreement with the EU. Pakistan's textile sector has helped to foster positive relations with the EU. Pakistan is no longer subject to import duties from the European Union, and a bill passed in December 2013 gave it a Generalized Scheme of Preferences status (GSP Plus).

The agreement and task distribution started in January 2014 and will last through 2017. The European Union will profit from importing inexpensive textile items from Pakistan. Still, the latter will aim to gain an edge by fostering employment growth and economic development in the industry. In the first year of the agreement, it is predicted that the GSP Plus will raise exports of textiles and clothing alone by $650 million.

Policy interventions

The Pakistani government has also improved the 2014–2015 textile policy to encourage and advance the industry. The modifications emphasized having the proper infrastructure, making the right investments, having suitable training facilities, and having the proper research facilities for the textile sector.

To increase the production capacity of clothing in Karachi, Islamabad, and Faisalabad, it will also focus on regional commerce. However, the nation's administration has failed to address the energy situation.

The government promised to develop gas and continuous electrical facilities to increase power availability but has yet to do so. This has had a significant impact on Pakistan's textile sector. Manufacturers were forced to switch to alternate electrical generation techniques, including generators and inverters, increasing manufacturing prices.

Electricity shortages lead to higher costs and worse profitability for the nation's textile exporters. Numerous factories closed down due to a lack of power supply, leaving thousands of people without jobs.

Prevailing scenario

The expiration of a European preferential trade deal has already impacted the sector. It was severely affected by the global financial crisis the previous year, and top executives of apparel firms anticipate that it may be further affected if the rupee keeps strengthening. 5.4 percent of the island's gross domestic product was generated by textiles and apparel in 2008 as opposed to 6.5 percent in 2007, according to figures provided by the Mauritius Chamber of Commerce and Industry.

The industry creates 11% of the employment in Mauritius and receives the bulk of the $340 million stimulus package announced in December. It also adds Rs 28 billion to export revenues.

Pakistan Hosiery Manufacturers & Exporters Association's Central Chairman of the Council of All Pakistan Textile Associations, Jawed Bilwani, Zonal Chairman of the All Pakistan Textile Processing Mills Association, Zubair Motiwala Chairman of the Pakistan Knitwear & Sweater Exporters Association, Arif Lakhani Former Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association Chairman Rafiq Godil Chairman of the Towel Manufacturers Association Khawaja Usman (TMA) According to media reports, Farrukh Maqbool, Shaikh Muhammad Shafiq, the former chairman of the Pakistan Readymade Garments Manufacturers & Exporters Association, and Abdus Samad, the chairman of the Pakistan Cloth Merchants Association, recently issued a joint statement in this regard.

Challenges galore

According to the heads of the trade associations, cotton yarn is sold at an international rate. Therefore, depreciation raises the price of cotton and yarn in Rupees. They also note that cotton yarn is more affordable in Bangladesh than in Pakistan due to reduced utility costs.

Nation's currency crash 2023; According to one last week of January 2023 media reports, "cash-strapped Pakistan which is facing an economic crisis of sorts in a dire straight of cash-strapped state presently has its currency plummeting to historic low value against the US dollar in the interbank and open market.

Jawed Bilwani, Central Chairman of Pakistan Hosiery Manufacturers & Exporters Association (PHMA)alluded in one of the media interactions that, " The Pakistan rupee has fallen precipitously in recent months leading to inflating the cost of doing business and has a disastrous impact on the economic prospects of Pakistan textiles as make no mistakes cotton yarn is available at an international price only as any given devaluation will only hike cotton and yarn price in Pakistan rupees as an after effect.

Additionally, the stronger greenback/USD poses mounting price pressure on other facets of the business too making importing machinery much more expensive hurting business interest, particularly in cases where machinery demand had been placed previously.

Latest Textile Events

09 February 2023, Mumbai

In a good way, socks are essential apparel, second skin for comfortable footing, fundamentally sock is nothing but a piece of apparel/garment the wearer will only wear on the feet and, invariably is supposed to envelop the ankle portion of the leg or let us say a part of the calf. 

According to estimates, The Indian socks industry is projected to be worth around $2.5 billion and is expected to grow at a decent trajectory of CAGR (Compound annual growth rate) of 8.4% between the projected period from 2021 to 2026. And some of the trade sources it is expected to account for 4% of the market for innerwear.

Major big-time prominent hosiery players in the industry include Lux Industries, Dollar Industries, Amul, and Rupa & Company among leading players in this sector highly dominated by regional unorganized players. More particularly popular Indian socks manufacturers are Mustang, Super Socks, and Bonjour Group besides men's wear prominent players too have a play in these evolving & growing trade segments such as Van Heusen and Park Avenue to name a few.

India is one country where socks till date are sold more popularly from the typical hosiery outlets, but lately, there has been effort put in by leading players towards both premiumization and improving product recall and visibility it is been retailed from LFR (Large Format Retail), EBOs, Departmental stores, and not to mention its growing sales from online retail channels/market places. 

Shaping the future; Despite the market's relatively small size, it has tremendous room for expansion. Socks as a category are anticipated to expand faster than innerwear, which is estimated to increase at a CAGR of about 15%. The future of any segment solely depends on how well it is backed up by the spirit of innovation and trade's good and sustainability practices.

Changing marketing perspective

In the past, socks were distributed through the same methods as innerwear. Hosiery stores and MBO account for around 80% of sales, with the remaining 20% coming from LFS, EBO, and online.

Even though brick-and-mortar businesses dominate the sector, trade brands/labels continue to heavily focus on creating a solid online presence. However, the market for the future is online. Therefore we have made considerable investments to ensure that we are future-ready.

There is a growing recognition that conventional retail would now dominate the lion's share of the industry. The e-commerce market for fashion is predicted to treble over the next three years from its current share of 5%. Thus we must concentrate on this area.

Sock industry and the various alternatives

There are several alternatives for undergarments, including textured, patterned, sheer, opaque leggings, pantyhose, and fishnet stockings.

Global market size view; By 2015, the global apparel market is anticipated to increase and reach USD 20.3 billion. The largest markets for underwear will be in North America and the EU, which will account for 65% of the worldwide market.

In terms of market value and sales volume, the EU will be the largest market for underwear. The once-large market of North America will experience a downturn in the years to come.

The fall will be brought on by the recession, which will cause an expected slowdown, tighter budgets, and diminished consumer spending power. North America would still fall short of the EU in hosiery market share, notwithstanding the reduction. 2010 saw a 1% decrease in the current value in Japan. The latest estimate of market worth is 595.4 billion.

Japan's hosiery market has suffered because of a declining youthful population, an increase in older adults, and a low birth rate. In addition to adopting the Rules of Origin, Japan is seeking to implement Free Trade Agreements with other Southeast Asian nations (RoO).

Evolving trade dynamics

This makes it possible for low-income countries (from India, China, and Pakistan) to engage in duty-free commerce with Japan. The hosiery business is undergoing a revolution due to changing lifestyles. Particularly among the younger age group, manufacturers are seriously trying to enhance their market share.

Marketing landscape

Pricing competition is essential for building a solid market for the brands. Companies engage in severe rivalry to win over consumers by giving the finest deals and offering promotional discounts. Even better, several manufacturers sell value-added multipack products for dirt cheap. The target market for underwear is primarily young people.

Despite these encouraging signs, the industry's primary focus is on people between the ages of 15 and 29. Only 35% of the market's total comprises this category. People over 30 are still growing, which bodes well for the future of apparel. They account for 75% of the market's overall revenue, making them a lucrative target for hosiery makers.

Customer Perception

The bright side of the Indian socks industry has shown a considerably consistent growth trajectory and enormous potential through the years.

With increasing consumer demand, comes the need for technological advancements, diversifying into an array of sub-categories catering to the needs and requirements of a vast consumer base Pan-India in a tropical country like India and much-needed government support, the industry is set to leapfrog and is in for a bright future.

People in this market category want a more extensive size range emphasizing comfort, ease of maintenance, and freedom of movement. They can have trouble getting dressed due to other age-related health conditions.

All of these elements are crucial in influencing the market. The two demographics that require the attention of hosiery makers are older age groups and sizes.

Latest Textile Events

 06 February 2023, Mumbai

The largest synthetic fabric market in India is located in Surat. It has over 75,000 textile merchants who employ 8.5 lakh power looms and over 400 processing facilities to create more than 4.5 crore meters of fabric daily. These are then sold in 200 wholesale marketplaces with over 70,000 stores and 15 lakh people who operate in those markets.

The sales have fallen to an all-time low in the last several months, but this textile powerhouse is currently in an unprecedented crisis. Nearly 70 processing and dyeing operations have already had to close.

The bigger picture of Surat textile

The Federation of Surat Textile Traders Association's Manoj Agarwal claims that although output has increased, sales have become problematic. We need help with domestic sales, he claims. The textile industry in Surat is being impacted by inflation because consumers put off buying clothing. There is a lot of production, but the issue is sales.

The main problems are rising import coal costs, lignite coal prices, and limited demand. The cost of coal used to be one rupee a meter, according to South Gujarat Textile Processors Association President Jitu Vakharia. Whether it is high-scale or regular fabric, nothing costs less than Rs 2.5-3.25 per meter.

Before this, we could purchase coal on credit, but now we must pay in advance or upon delivery. The government has been urged to establish a garment center by Surat's textile sector to support the transition to ready-made clothing. It's a five-year-old request that has yet to receive any attention.

The ability to produce ready-made clothing would enable them to meet the rising domestic demand and open up opportunities for international commerce and exports. They will have considerable potential in a market with weak demand because less than 5% of the cloth produced in Surat is now exported.

The allocation of various financial aids

A glance at the financial allocation reveals that the budgetary funds for the textile industry have increased by more than 20%, which might be utilized to support the sector's expansion.

The overall textile grant for the fiscal year 2023–24 has been set at Rs. 4,389.34 crores, or around 22.6% more than the amended budget grant for the fiscal year 2022–23.

PM MITRA Parks received a grant of 200 crore rupees from the current budget, whereas the PLI Scheme received a grant of 5 crore rupees. Plans encouraging investments and capacity building, such as the National Technical Textiles Mission (NTTM), PM-MITRA, and textile development cluster plan, receive higher financial allocations.

Additional wise choices have been made in this budget. This budget is often a good one that emphasizes growth and the future. India's effort to become a strong economy with the quickest growth rate will be aided by the focus on inclusive development, green growth, young power, and investment in infrastructure.

The announcement to expand the PLI program to new industries and assistance for the MSME sector would boost the nation's exports and investment. Given that the nation is only generating 20% of the required machinery, the government might have avoided raising the essential customs duty on textile machinery from 5% to 7.5%. This will affect the following investments in this industry.

For the next three years, or until domestic producers are established to fulfill domestic demand, the industry has recommended the retention of a 5% import levy on all textile machinery.

In the absence of the Technology Upgradation Fund Scheme, which was popular from the first of April 1999 to the end of March 2022, this will have some effect on both the recently announced PLI Scheme and PM MITRA Scheme as the competitiveness of the world market.

Although the funding for the MAI Scheme has increased from Rs. 160 crores in 2022–2023 to Rs. 200 crores in 2023–24, this may not be sufficient given the growing number of possibilities for showcasing provided by international trade exhibitions, which must be taken advantage of.

A planned strategy for aggressive foreign marketing may be announced with a sizable corpus to encourage exporters to promote their products internationally.

Latest Textile Events

11 February 2023, Mumbai

Lately, the Fashion sector is started to see the emergence of renting as a business model for businesses in their own right as an effort to stem the kind of environmental footprint fashion companies typically generate in the normal course of it as it's a deeper issue maligning the image of this sector since long, considering the clamour for a circular economy approach is getting louder.

Executive summary

Online Clothing Rental Market Size is Expanding its Assortments under Subscription Model Plans to Reach its Clients | FMI. The article is a conscious exercise of delving into the argument to ideate, develop and deliberate the proposed hybrid approach in the trade discourse to efficaciously enable fashion firms in curating & figuring out apt design evolving enterprise models/solutions factoring in actors like the customer and the appropriate business economic view.

Emerging scenario

Online clothing rentals platforms such as Rent the Runway and Le Tote have become popular among young consumers who value access over ownership. Considering the ease & convenience of digital/online shopping and flexible rental plans, consumers can now rent clothing items for special events/occasions, workwear, or daily wear.

These platforms offer a range of clothing choices/options, let us say offerings like designer/bespoke gowns to casual wear, at affordable prices as simple as this.

Besides, they give the benefit of having quick access to an ever-changing selection of clothing without the worrisome issue of owning and storing a large bulkier wardrobe.

Taking a dominance

It is likely that the U.S. will retain its supremacy in the geospatial North American online clothing rental market.

The high spending power of consumers in the U.S., their focus on self-esteem and good looks, and the widespread availability of the internet are all driving growth in the market. Additionally, the growing trend of environmental sustainability and the cost-effeciency of rental apparel/clothes are expected to continue spurring the desire/aspiration & demand for online clothing rental services.

Market leaders are also well invested presently in new product launches, partnerships, and technological advancements, which will further solidify their position in the market.

However, it's important to note nuances like that competition and market dynamics are always subject to change in emerging landscape, and the future of the market may still be subject to unanticipated developments. The clothing rental market in the US is leapfrogging, with many online platforms offering an extensive range of options for consumers.

With the constant increase of sustainable living and conscious consumption, consumers have started to look @ new and innovative ways to refresh their wardrobes without adding to the associated problem of fast fashion and post-consumer waste.

The online clothing rental market in the US provides a tenable answer to this idea by allowing customers to rent high-end fashion items for a fraction of the cost of buying them outright.

Sum-up

Online garment rental aims to reduce clients’ spending on new apparel for any special occasion or purpose. The US online clothing rental market is revolutionizing the way people consume fashion.

Against the backdrop of the improving popularity of living & buying sustainably and the desire for frugal ways to stock & plenish an individual's wardrobe, the online clothing rental market is poised for significant growth in the coming years.

By offering convenient, affordable, and sustainable options, the online clothing rental market is shaping the future of fashion consumption.

Latest Textile Events

08 February 2023, Mumbai

The Hong Kong-based EPIC Group, established in 1984, is one clothing manufacturing company that has consistently gained recognition from the world's apparel sector.

The EPIC Group is adamant that providing full-service client solutions including design, product development, sustainability, innovation in products and processes, and order fulfillment—is more critical than merely producing goods.

Recently, Team Apparel Resources (AR) met with Roger Guy Young, Chief Strategy Officer, and Ranjan Mahtani, Executive Chairman of the EPIC Group in Dhaka. Our team had a frank conversation with Ranjan and Roger about how EPIC Group is operating differently to be able to support its objectives and carry out its ambitious ambitions throughout the meeting.

Within the previous three years, the sector has seen enormous upheaval. We all agree that during Covid-19, things were horrible for everyone in the business, not just us.

However, following the epidemic, things improved very rapidly. After a slowdown in 2020 and early 2021, consumers were back on the streets. They chose to engage in "revenge shopping," and retailers strengthened their purchasing power. The garment manufacturing business benefited significantly from these initiatives, and we were no exception.

The client demands and their expectations

The procedure for fulfilling client orders is evolving, another development we are now seeing. We have warehouses in the USA, but we only transport some of our shipments; instead, we build, ship, and distribute directly to retail locations. By doing this, we significantly increase supply chain speed and efficiency to satisfy customer needs, much as a domestic brand or retailer would.

Young people purchase in many new ways; thus, all supply chain participants must be prepared for these shifting purchasing habits. However, just when we believed the pandemic's problems were behind us, we faced new problems due to the crisis in Ukraine, the economic downturn, and record prices in specific key shopping locations. We have built a very resilient organization and business model, and since we believe it is all now just part of doing business, we are prepared to respond to change in the world with incredible speed.

Our continued priority is keeping our top line steady. Fortunately, our company has a low debt-to-equity ratio and a sizable cash reserve, which is essential for running a business, especially in these uncertain times.

Owner of Parimala, Lady Tailoring Classes G. Kousar stated, "I have been in the tailoring industry for seven to eight years. Previously, each batch had six participants who attended the classes; currently, there are just three.

In addition to teaching stitching, I also sew garments and profit from that venture. Due to the epidemic, my consumer base has been cut in half, and most of my purchases come from family and friends. The majority of Indians relied on neighborhood tailors up until the late 1990s.

Due to a lack of size standardization, few ready-to-wear clothing alternatives were available to the public. A 2014 research by the India Retailing Bureau found that consumers are increasingly choosing ready-to-stitch (RTS) fabric and customizing their clothing to fit them.

"During the holiday season, I made a significant amount of money, but now that the virus has spread, fewer people are celebrating holidays, so my business has entirely dried up. I make between Rs 10,000 and 20,000 per month. Managing all the household bills today is quite complex”, she continued.

Latest Textile Events

06 February 2023, Mumbai

The last full Union Budget before the next general election in 2024 is a mixed bag so far as the Indian textile and apparel (T&C) industry is concerned.

The underlying stated policy objective here was to trigger a concomitant rise in job creation.

The budget delivered a very good message that the govt focus on microeconomics is very close. Unquestionably Finance Minister Nirmala Sitharaman’s focus on proven and trusted infrastructure, investment, green growth, youth power, and inclusive development approach has got an unequivocal thumbs-up from across the trade & industry Pan India as both stated intent and measures announced have broadly gone down well and is a +ve for consumption growth for the economy.

In the hindsight: The industry ask

The sector urged to raise interest subvention to 5 percent, as it stands at 3 percent presently, and also stressed that the government needs to provide wage subsidies to sustain the lives of these factory workers for at least a year.

Tirupur Exporters Association (TEA) had submitted a pre-budget memorandum to the FM putting out the issue of increasing the interest benefit under the Interest Equalization Scheme to 5 percent across the board to give impetus to the knitwear hub.

The revival of apparel manufacturing in India is vital as it has a significant number of female employees who are the sole breadwinners in their families. Additionally, an amnesty scheme for defaulting exporters was featured expecting this to help these exporters bounce back/turn around in fortunes.

The sector has also urged the Amended Technology Upgradation Fund Scheme (ATUFS) to not only provide incentives for digitalizing manufacturing processes but also help in funding research in quest of man-made fibers (MMF) that don’t require the exploitation of natural resources so as to say.

Meanwhile, Akhil Jain, Executive Director, Madame alluded, "PLI for the apparel/garments industry should be announced soon in which MSMEs are also able to participate given improved economic prospects in some of the PLI schemes announced in recent years.

Also, he eloquently urged GST of 12 percent on all apparel should be fixed at a standard rate of 5 percent to give a much sought-after boost to the fashion retail industry at large.

He further avers, most of the inputs, services, and capital goods required by the retail industry experience an elevated rate of GST (mostly 18 percent), while the output rate (ITC) of GST is lower. This results in an unutilized input tax credit (ITC) of GST causing the locking up of working capital (WC) and the resultant elevated cost of operations.

Furthermore, the GST council should look at amending the formula for calculating refunds under the inverted duty structure (IDS) category in order to unleash unlocking of refunds of unutilized GST on services as well as on capital goods.”

Lowdown on budget

Takeaways

Boost to ELS cotton

The government to focus on enhancing cotton crop productivity by adopting a cluster-based approach with a public-private partnership model and enhanced use of advanced technologies with a focus on increasing cotton crop productivity.

Notably, this step supported related textile stocks that rallied up to 3 percent in morning deals on NSE.

SIMA views on the budget

Ravi Sam, Chairman of SIMA expressed gratitude to the administration for considering the SIMA suggestion and outlining a plan to increase the production of extra-long staple cotton.

He said that” SIMA could match foreign ELS cotton types and will take steps to boost output. According to him, the industry began to experience a shortage of ELS cotton with the introduction of BT technology only for long-staple cotton.

He added that this is an initiative for the Aatmanirbar Bharat benefit for the entire textile value chain, including the cotton farmers. The country produces only 5 lakh bales of superior-quality ELS cotton and is heavily dependent on imports.

The industry requires about 20 lakh bales of ELS cotton, but the country needs around 20 lakh bales. He also appreciated the focus on inclusive growth and skill development, which will benefit the labor- and capital-intensive textile sector”.

The budget emphasizes the seven goals, or "Saptarishi," according to K M Subramanian, president of the Tirupur Exporters Association (TEA), which will spur economic growth. He stated that lowering logistical costs will be the principal focus for infrastructure development. He expressed his gratitude for the emphasis placed on green development.

Subramanian expressed his appreciation for the enhanced funding of Rs 900 crore for the ATUF (amended technology upgradation fund) plan for 2023–24 as compared to Rs 600 crore the previous year and expressed optimism that the higher funding will aid in resolving the ATUF pending claims.

However, there was no mention of the continuation of the ATUF plan in this budget, and the speaker expressed optimism that the administration will do so soon.

Focusing on increasing extra-long staple (ELS) cotton output will improve the production of value-added clothing and decrease ELS cotton imports.

He applauded the addition of Rs 9,000 crore as collateral for Rs 2 lakh crore in loans to MSMEs, extending the credit guarantee plan for MSMEs through April 1, 2023.

Green Growth gets a spotlight

Hon'ble FM announced the contours of the budget, "Green growth will be one of the themes around seven priority sectors as earmarked in the Union Budget 2023, and ‘Green growth’ priority sector will span multiple programmes such as green fuel, green energy, green farming, green mobility, green buildings, and green equipment ensuring sustainable finance to the sector.

This will also definitively entail policies/enablers for the efficient use of energy across several sectors. It is noted that these green growth initiatives will help in reducing the carbon intensity of the economy and lays a solid foundation as an economic kicker, thus generating large-scale green job opportunities".

AEPC view

Naren Goenka, Chairman, AEPC is very satisfied with the delivered budget and articulated stating that" Budget net net is very positive, greatly growth-oriented and forward-looking one based on the regime of predictability and trust.

The sharp focus on infrastructure, investment, green growth, youth power, and inclusive development will promote boosting India’s journey to be the fastest growing- credible & robust global economic growth engine.

Notable amongst them is the announcement of a Rs 9,000-crore corpus for a revamped credit guarantee scheme that will relieve the stress of small and medium enterprises (SMBs) in India.

Additionally, the announcement to cover more sectors under the PLI scheme and, valued & timely support to the MSME sector is a catalytic action to help thrust exports and promote tangible investment in India.

Again as demanded by the sector for a long, the incremental allocation for Interest Equalization Scheme from Rs 2,376 crore in 2022-23 to Rs 2932 crore in 2023-24, up 23 percent, will consolidate the export case.

The increased allocation of ATUFS from 650 crores in 2022-23 to Rs 900 crore in 2023-24 an increase of 38 percent will help in clearing/releasing payment of pending cases speedily.

Further Chairman AEPC observed, another feather in the cap is addressing a critical area of removing a large number of compliances /irritants and converting over 3400 legal provisions into decriminalization, and amending 42 Central Acts will help the smooth the revival of businesses and redress trust deficiency issue”.

Misses

Ravi Sam, Chairman of SIMA pin pointedly brought to the fore playing devil's advocate that what the government could have done was to avoid the increase in basic customs duty on textile machinery from 5 to 7.5 percent considering that, the nation does not even produce 20 percent of the machinery requirement.

Commenting on the Budget trade veteran Sanjay K Jain, MD TT Ltd, Ex-CITI Chairman & Chairman ICC National Textiles Committee categorically said, “As expected there is nothing really for the textile industry in this Budget.

Although he is appreciative of putting more money in the hands of spenders with more disposable income in consumer hands owing to healthy direct tax cuts also, with inflation easing off and moderating both at WPI & CPI levels presently, will quite certainly spur more consumption.”

Mayank Tiwari, Founder, and CEO, ReshaMandi, India's first & largest digital ecosystem for textiles, very specifically said “The government’s decision to relax taxation for start-ups for up to 10 years, in addition to the setting up of bio hubs in rural areas, will vastly ease the process of setting up units in villages and hinterland.

Our efforts to improve the supply-chain network for all our stakeholders in the natural fibre ecosystem supply chain receive a major boost from the decision to support collaborative projects between farmers, states, and businesses to provide input supply extension services and market connections.

Besides providing direct access to the global markets, easy access to the internet will expose the farming community to the best trade and agricultural practices globally.

The assurance of financial assistance to traditional artisans such as weavers, who are ReshaMandi’s strategic stakeholders and partners, is a decision we welcome with much delight and satisfaction.”

The government's aims for India's textile industry are evident in Nirmala Sitharaman, finance minister remarks, in the Union Budget 2023–24. The minister focused particularly on cotton with extra-long staples (ELS). Government policy initiatives will also be more focused thanks to five new HS codes.

Additionally, increased funding under RoDTEP, RoSCTL, and ATUFS may offer aid. The government has determined five additional HS Codes to further categorize cotton according to staple length. This will assist in adjusting policy support for the sectors that depend on imports or require other incentives.

By implementing a cluster-based and value chain approach through public-private partnerships (PPP), the finance minister has indicated that the government is focusing on increasing the productivity of ELS cotton. PPPs entail cooperation between farmers, the state, and industry for input supplies, extension services, and market links.

The textile sector is currently keenly awaiting further information on the policies in this area.

PM’s aims and visions

Reform, Perform, and Transform

Reconfiguration of global supply chains (GSCs) is India’s biggest growth driver and a serious need to press on the reforms in Indian textiles.

The minister announced a rise in the import tax on textile machines to 7.5%. It can affect the following investments in this industry. However, it is consistent with the H'ble PM, Narendra Modi's "Make in India'' aims and Atma Nirbhar Bharat.

For the next three years or until domestic producers are established to match domestic demand, the industry organization CITI has asked for the retention of a 5% import levy for all types of textile machinery. According to Budget papers, the amount allocated for the RoDTEP plan has grown from 13 699 billion to 15 069 billion in 2023 and 2024.

From 7,641 crore to 8,405 crore is added to the RoSCTL scheme's budget for 2023–2024. The budget for the Amended Technology Upgradation Fund Scheme (ATUFS) is also enhanced, going from 650 crores in 2022–2023 to 900 crores in 2023–2024. The customs charge on naphtha has been raised from 1% to 2.5%.

Latest Textile Events

10 February 2023, Mumbai

Interactive Session with BGMEA, Delegation in India conducted on 09-02-2023 in Delhi where the atmosphere was electric and it was a broad-based representation of BGMEA, Bangladesh with a formidable group of who is who of brilliant minds with captains of the trade from both sides on & off the dais including Faruque Hassan, President-BGMEA, Rajib Islam, Allue sourcing, Shovan Islam Sparrow group & Gaurang Bhagat, President Maskati cloth Market Association, Prashant Mohota, MD of GIMATEX amongst few others leading to ground-breaking deliberations sharing trade insights & vision in free-wheeling interaction revealing the secrets of cross border relationship between two natural allies.

The BGMEA strongly maintains that the textile industry's resilience has led to taking it to level next/elevated levels in the global textile economy.

Secret sauce

Context setting; As per BGMEA the coveted sector brings in a lot of, precious export dollars to the nation building its economy, employment generator, and wage earners and all is happening on the back of the government's enduring efforts together with worthy valuable international development partners, humble productive labour force, an undying spirit of entrepreneurship.

We are currently exporting about $42-$43 billion worth of garments. Many classical examples are there when the trade was in its infancy a few decades ago and, many had plunged into an ocean of global textile/apparel industry without even knowing how many crocodiles exist in it, putting their skin in the game helped us grow unprecedently, working very closely with all the stakeholders is a key enabler besides, the tag of LDC support especially in the European Union because of duty access is a game changer.

Graduating LDC Status; By the year 2026, Bangladesh will be losing the tag of LDC but still, it will keep enjoying privileges for say next three years in the transition phase.

Green initiatives

As per reliable trade estimates Bangladesh is home to some 157 Green garments Factories including 47 Platinum, 96 gold, 10 silver, and 4 Leed certified.

Whilst it is "Work-in-Progress" as some in excess of 500 factories are said to be under certification where serious efforts are underway.

Needless to underscore here, 'Green construct' let us say A LEED-certified factory building enables lesser unforeseen industrial mishaps and, is any day much more energy-efficient than conventional building structures also comes with inherent advantages offering businesses save money (saving is earning in some sense), augmenting workforce productivity/efficiencies. Besides unequivocally giving a distinct impetus to a firm's economic prospects/financial value, which is a classical case of demonstrability and serious commitment going down the path to sustainability.

Again, these initiatives meaningfully bring onboard features e.g. raising the entity's industrial image, addressing critical issues like workplace safety, and so forth.

And there's a lot of cooperation, and opportunity is real. Because Bangladesh garments manufacturing unless you see it, you want to quite comprehend how the sector has grown and the type of growth hunger it has demonstrated through decades always eager to innovate, pushing limits focusing on green and sustainable production processes are now most of the stakeholders are working more proactively in environment friendly and we always back our words with action.

And we are now working more proactively in environment-friendly fashion. The industry is working on energy-efficient, recycling renewable energy, and thinking big by keeping buyers' interests in mind and standing by their sides whenever markets are tough. As per BGMEA spokesman," It is a big challenge today for us to make our industry safe and sustainable & will work for the factory safety area, the compliance area more seriously in the coming seasons.

It's not only the green factory, it's the capability, it's the magnitude of the factories that really will open up new vistas helping cut a lot of ice.

Indian Garment Import From Bangladesh: An Overview

India's garment imports totaled $ 777.35 million in the first nine months of 2022, up 25% year on year (Y-o-Y).

Reacting to this BGMEA, President very firmly iterated that vis-à-vis a ballpark import figure of around 7 Bn$ as an Indian export to Bangladesh of our existing around 42-43Bn US$ market size where our industry runs a big deficit. This is quite sanguine to assume/there is merit in assuming our apparel exports to India are an inherent part of the healthy give and take meaningful sustainable relationship.

The role of India and Bangladesh collaboration

It's a great market for India. Because if you see the entire exile value chain, India is very heavily invested in the upstream CAPEX-intensive industries of cotton spinning and weaving say many trade observers.

And on the other hand, Bangladesh is very heavily invested in skill-intensive industries of garment manufacturing and a lot of processing as well. The industry today is big for China cotton buyers because of Indian cotton restrictions/sourcing scarcity out of India which only encourages industry in the given direction besides trade nuanced dynamics.

According to BGMEA spokesman," For cotton-based apparel/garments, we need raw cotton. Of our total requirement. We don't produce even 2%. So we are completely dependent on India and other cotton-exporting nations".

So it's a perfect fit as per Gaurang Bhagat, President of Maskati cloth Market Association," As we have the batsman, Bangladesh has the bowler. So if you make a cricket team, I think it makes a perfect eleven and is like a perfect marriage wherein we will complement each other, not as competitors".

BGMEA president also iterated," I think in the coming days, we have more opportunities to work together. And we hope each other will work together.

It's an opportunity for us because we are looking at reducing reliance on China to bank on alternative destinations and India is one of them being a country right next to us.

Indian textile skilled professionals contribute remarkably to the Bangladesh growth story. Synthetics or MMF which is mostly petrochemical again India has a lot to offer here. As cannot produce even 10% of the MMF requirement in our country. So we are looking forward to importing from India the manmade fiber as well as the other types of fabric.

Where we lack; Another missing piece in our textile puzzle and, that too helps India, as we don't have anything homegrown here right now in areas like textile machinery where India is on a strong wicket".

Prognosis

If you look at how the industry is poised today as the sector is likely to grow leaps and bounds, it is quite possible as claimed by a range of BGMEA members, "We have targeted and done the arithmetic in a very calculating way taking only 10-11 percent growth, though we have a growth of 18% so far. And today with exports already worth $42 billion we are in a good place to touch a hundred billion dollars likely to be Inshallah! by 2030".

As a quick trade estimate a quarterback has mentioned that, against our $42 billion net exports, imports from India are about $4.5 billion. Additionally, the sector buys a lot of other chemicals including chemicals, varied types of machinery, accessories, and buying software, etc. As a ballpark figure altogether, out of $15 billion in texture-related imports from India last year, it is believed import was almost about $7 billion.

BGMEA's conservative estimate is," Going forward, India will be around $15 to $20 billion, just only on textiles in our 100 Bn$ growth story. And on top of that, we have a lot of other byproducts that we also need for the apparel/garment sector, exports oriented garment sector.

So India could be our best sourcing partner given the improving facilitation of trade between the two countries. As you know, we used to buy mostly from China earlier and India is our next-door neighbor.

Indian suppliers are well advised to compete & consider our China price because we are importing now from China and so was earlier. And we are willing to onboard India as that is meaningful for both of our countries or sectors" alluded Faruque Hassan, President-BGMEA.

Latest Textile Events

07 February 2023, Mumbai

In 2019, the clothing and fashion sector had phenomenal development. The industry is poised to raise its graph in the upcoming year after a decline in recent years.

Consumer demands for sustainability and digitization are forcing the fashion sector to adopt a more consumer-centric strategy. According to MC Kinsey and Company, the only players who will survive can adapt to changes in the fashion sector. As a result of shifting customer buying habits, 1875 fashion businesses closed their doors in 2017.

The situation deteriorated in 2018 as 9000 retail locations are estimated to close their doors due to changes in customer buying habits.

The growth of the business

The fashion business may rise by between 3.5 percent and 4.5 percent in 2019. The industry's revenues, however, are anticipated to increase from $481.2 billion in 2018 to $712.9 billion by 2022. Opportunity comes with challenges, as the adage goes. It is no longer a secret that the fashion business is one of the most polluting sectors on the globe. Everyone, from customers to producers, knows how fashion destroys the environment. Enterprises are attempting to adopt more environmentally friendly practices. Additionally, shoppers favor sustainable clothes over all others. However, more is needed to stop the enormous trash and pollution the fashion industry produces.

However, to achieve sustainability, millennials and the generations following them are calling for urgent reform. 73% of millennials are prepared to pay more for sustainable products, according to a Nielsen Study.

That's fantastic news for the environment and companies that are sustainable. There has been a noticeable increase in new and developing fashion labels that are sustainable as a result of the sustainability movement. These companies have committed to reducing their clothes by placing a higher value on recycled, circular, and used clothing.

Recent declines in the fashion business can be attributed to inadequate technical planning and implementation. To suit the requirements and desires of the market, the sector is integrating technology progressively.

The major firms in the market introduce novel ideas to alter consumer buying habits. However, the sector never really takes off. Even at the transactional level, the industry deals with broader concerns beyond customer buying habits and preferences.

Brands and retailers require a digital mentality to close the gap between fashion and technology. Real innovation and durable technology should be the emphasis of the apparel/garment and fashion sector. The sector must identify its pain areas and collaborate to put forward creative ideas to address its particular problems, always keeping KPIs in mind.

Various challenges

It is challenging for market participants to keep up to speed with current trends, customers, and market demands due to the fashion industry's constant change. The only players who will stay in the game for an extended period can adjust to change over time. Millennials and Gen Z are fully entrenched in the digital world to access more information than ever before in the age of online purchasing.

They don't want to choose anything; instead, they want to select the correct items from the appropriate location and price. Consumers are interested in learning more about specific brands, materials, and fashion trends.

They have an urgent need for high-quality items. It may be challenging for clothes manufacturers and merchants to adapt their things to shifting consumer preferences, trends, and behaviors.

The capacity of the garment business to adapt to change is well recognized, with new trends and fashions appearing often. Change has always been a wardrobe need in my sector that occurs roughly every three months. Due to this ongoing requirement for modification, the industry has a unique set of difficulties.

For companies and retailers, keeping up with the industry's rapid speed may take time since they must keep up with the newest fashions and trends while simultaneously controlling expenses and ensuring profitability. Unicommerce chose to move ahead and compile e-commerce fashion trends, difficulties, opportunities, and solutions in response to the industry's cyclical change so that you may manage and arrange your company action plan in 2023.

With the sector expected to reach $190 billion by 2025–2026, the Indian textile and apparel market offers enormous development potential. Indian enterprises must use government assistance programs, satisfy international buyers' sustainability requirements, and prioritize supply chain traceability to achieve this goal and create a sustainable textile sector.

Latest Textile Events

 04 February 2023, Mumbai

Fundamentally, let us look at how we exactly describe carbon tax which reflects upon in a great sense the social cost of carbon considered a necessary policy tool with authorities/stakeholders to check carbon emissions given that the globe is vying to attain net zero emissions someday. 

Green Growth is to re-emphasize the commitment of any sector more relevantly sector like textiles tagged as a heavy polluter with an underlying theme of fundamentally transitioning business models to factor in the social cost of carbon from now on with the emergence of carbon taxes/carbon policy intervention in some advanced nations on the background thus, throwing economic opportunities for the businesses.

SCC
The social cost of carbon (SCC) is to check carbon emissions more importantly in sectors such as textiles which are big villains in polluting mother earth.
SCC is An attempt to help measure and evaluate underpinning so to say the net present value of climate change's potential effect through the coming/forthcoming 100 years or thereabouts of one incremental carbon tonne so emitted to the atmosphere presently.

It is in effect a marginal global damage cost of carbon emissions produced during the process.
The social cost of carbon is used in weighing the pros and cons (Cause & effect thesis) to assess and quantify the specific dollar value of any given action/policy's potential impact on climate change per se on account of variation it results in the emission of (GHGs) greenhouse gas emissions.

The theme of green growth

The clamour for concerns around climate change is the largest driver of change and is only getting louder in the public dispensation globally and the sustained efforts of many activists, active environmental groups, and NGOs, tightening government regulations and heightened public awareness, to mitigate carbon footprint is arguably one of the top corporate agendas of the day.
India too is very seriously committed to accomplishing this ambitious and audacious target of carbon neutrality target by 2050 and keeping global warming at bay.
No brainer raising grave concerns over environmental and green gas emissions for polluting sectors like the textile/apparel sector to push the players hard & motivating them not only to mitigate but keep checking consciously its Carbon Footprint as we move ahead.
Decoding the fundamentals of the concept of 'Carbon credits' 
Carbon credits also interchangeably called in the trade parlance as carbon offsets (COs) are in effect legitimate use permitting the owner/user business entity to let emit an unquestionable degree of Carbon dioxide (CO2) or for that matter some other greenhouse gases (GHGs).  Theoretically, carbon footprint originates from the environmental/ecological footprint debate and entirely rests upon nothing but life cycle Assessment (LCA) and, needless to state is an intrinsic constituent of global emission trading norms to let the textile sector stay relevant and in shape and is a mechanism technically to incentivize businesses or nationalities/geographies/countries that emit low/no carbon.

Decoding carbon tax

A carbon tax is a tax imposed on the production and consumption of fossil fuels, such as coal, oil, and natural gas, based on the amount of carbon dioxide (CO2) they emit. The underlying objective of a carbon tax is to reduce greenhouse gas emissions and promote the use of clean and renewable energy sources.

Bottoms up; Valuable insights like carbon revenue recycling schemes can go a long way to address systemic issues and help in designing the appropriate carbon tax policy aligning/calibrating it with the larger interest of the trade and its economic fallout while maintaining and reducing the cost of a carbon tax for easier migration to the new regime.

Nuances

In the textile industry, the production of textiles is energy-intensive and generates significant CO2 emissions. The carbon tax would make it more expensive for textile companies to continue using fossil fuels, thereby incentivizing them to switch to cleaner energy sources. This shift towards cleaner energy sources would help reduce the carbon footprint of the textile industry and contribute to the fight against climate change.

Moreover, the revenue generated from the carbon tax can be used to invest in renewable energy sources and energy-efficient technologies. This would not only benefit the environment but also stimulate the economy by creating new job opportunities and boosting the growth of clean energy industries.

Load factor

However, some argue that a carbon tax could also increase the costs of production for textile companies, leading to higher prices for consumers and decreased competitiveness in the global market throwing a cat amongst the pigeons kind of a situation.

Therefore, it is crucial for governments to implement the carbon tax in a way that minimizes the impact on the economy while still promoting the use of clean energy.

Call to action (CTA) is how realistically the administrations globally can carve out the carbon tax policy designs taking multistakeholder on board to use trade valuable insights and understanding its potential social-economic impact in entirety.

In summary

Kicker; The relevance of a carbon tax in the textile industry cannot be overstated. As there is a business case today to reckon with that the fiscal/economic advantages are meaningful & quite gainful.

It is a tale of two cities maintaining growth built around the fundamentals of a sustainable development business model.

Another lateral view is to build an argument of structural change/reform imposing a consumption tax on industries like textiles as this being a cornerstone of life i.e. ROTI, KAPDA, and MAKAAN this shall arguably lead to benefitting the long-run emissions reduction & as a payoff, in turn, may help the economy to restructure.

It would help reduce greenhouse gas emissions, promote clean energy sources, and contribute to the fight against climate change. However, its implementation should be done to balance environmental and economic concerns.

Latest Textile Events