21 November 2023, Mumbai

The Indian textile industry, once struggling due to the pandemic and global economic downturn, has experienced a remarkable resurgence, reflected in the upward trend in stock market performance. 

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Major industry players have demonstrated strong financial results, attracting significant investor interest. This positive sentiment stems from several favorable factors:

1. FTA-Driven Duty Benefits: India's forthcoming free trade agreements (FTAs) are poised to grant duty concessions to local textile exports, enhancing their competitiveness in global markets.
2. Reduced Cotton Prices: The recent decline in domestic cotton prices has led to a substantial reduction in overall production costs, boosting profitability for textile manufacturers.
3. Surging Demand for Home Textiles: The growing prevalence of hybrid work arrangements and increased emphasis on home improvement have fueled a surge in demand for home textiles, particularly cotton sheets and terry towels. This has driven up orders from US importers.
4. Global Retailers' Inventory Optimization: Global retailers' efforts to streamline inventory levels have created opportunities for larger order placements from Indian textile exporters.
5. Investor Optimism and Stock Market Surge: Anticipating favorable market conditions in the second half of the year, Indian textile exporters are optimistic about the future. This optimism is reflected in the recent rise of textile-related stocks, with companies like Raymond, Vardhman Textiles, Arvind, Trident, Gokaldas Exports, Welspun, KPR Mills, and Himatsingka Seide witnessing gains of 4 to 12 percent. Additionally, Fidelity Investments India's acquisition of a 1 percent stake in KPR Mill in August 2023 further underscores investor confidence in the sector's growth prospects.

These converging factors have propelled the Indian textile industry towards continued growth and prosperity, demonstrating its resilience, adaptability, and significant potential to contribute to India's economic resurgence.

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18 November 2023, Mumbai

WHY India

From 142nd to 63rd: A Leap in Ease of Doing Business
In 2014, India's business environment was far from ideal, ranking a dismal 142nd out of 190 countries in the World Bank Doing Business Report.

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However, the country embarked on a remarkable journey of reform, propelling it to the 63rd position in just six years.
Reforms, Infrastructure, and Technology: Driving Change
A wave of government reforms aimed at streamlining processes and reducing bureaucratic hurdles transformed the business landscape. Investments in infrastructure and technology further enhanced the ease of doing business, paving the way for a more efficient and competitive environment.
Empowering MSMEs through Digitalization
Recognizing the pivotal role of small and medium enterprises (MSMEs) in India's economic growth, the government prioritized their digital transformation.

Initiatives aimed at enhancing their digital literacy and adoption of technology were instrumental in boosting their efficiency and productivity.
A Global Recognition: Two-Time Top Improver
India's unwavering commitment to reform and its efforts to attract investment were not gone unnoticed.

The World Bank acknowledged India's remarkable progress by recognizing it as a top improver for two consecutive years, making it the first BRICS and South Asian country to achieve this distinction.
A Beacon of Progress: Attracting Investment and Fostering Growth
India's improved business environment has served as a beacon for investors worldwide, attracting significant capital inflows and propelling the country's economic growth.

This transformation stands as a testament to India's dedication to fostering a conducive environment for businesses to thrive.

Exhilarating drive

1. India's business environment transformed.

2. Reforms streamlined processes and reduced hurdles.

3. Investments enhanced ease of doing business.

4. MSMEs empowered through digitalization.

5. Global recognition for two-time top improvement.

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16 November 2023, Mumbai

WHY India

The Confederation of All India Traders (CAIT) is projecting a bright future for India's retail sector, anticipating continued robust growth. 

This positive outlook is fueled by several factors, including the upcoming festive season and a growing preference for domestically produced goods.

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Festive Cheer to Boost Trade

India is gearing up for a series of upcoming festivals, including Goverdhan Pooja, Bhaiya Dooj, Chhath Pooja, and Tulsi Vivah. These occasions are traditionally associated with heightened consumer spending, and the CAIT expects this year's celebrations to generate an additional ₹50,000 crore in trade volume.

This surge in spending is likely to be driven by increased demand for traditional attire, home décor items, and sweets and delicacies. 

Retailers are already preparing for the festive rush by stocking up on inventory and implementing attractive promotional offers.

Vocal for Local: A Trend Gaining Momentum

The "Vocal for Local" and "Make in India" campaigns have gained significant traction in recent years, encouraging consumers to prioritize domestically produced goods. 

This trend was particularly evident during the 2023 Diwali sales, when Indian products dominated the market.

The CAIT attributes this shift in consumer behavior to a growing appreciation for the quality and craftsmanship of Indian-made goods. 

Additionally, the rise of e-commerce platforms has made it easier for consumers to discover and purchase locally produced items.

Looking Ahead: A Promising Future

The CAIT's optimistic outlook for India's retail sector is supported by several key factors, including:

• Rising disposable incomes: India's middle class is expanding rapidly, leading to an increase in disposable incomes. This, in turn, is driving demand for a wider range of consumer goods.
• Urbanization: With more people migrating to urban areas, the demand for organized retail is on the rise. This trend is creating opportunities for large-format retail stores and shopping malls.
• Technological advancements: E-commerce and mobile shopping are rapidly gaining popularity in India, providing consumers with greater convenience and access to a wider variety of products.
• Government initiatives: The Indian government has implemented various policies to promote the growth of the retail sector, such as providing tax benefits and encouraging investments in infrastructure.

In conclusion

The CAIT's optimistic outlook for India's retail sector is well-founded. The upcoming festive season, the growing preference for locally produced goods, and a supportive policy environment are all contributing factors to the sector's continued growth. 

As India's economy continues to expand, the retail sector is poised to play an increasingly significant role in driving economic growth and creating employment opportunities.

GIST

1. Festive Boost:

   • India's upcoming festivals drive trade.
   • Expecting ₹50,000 crore surge.

2. Diverse Demand:

   • Traditional attire, home décor, sweets.
   • Anticipating varied consumer spending.

3. Vocal for Local:

   • "Make in India" gains momentum.
   • Diwali 2023: Indian products dominate.

4. E-commerce Impact:

   • Rise of online platforms.
   • Facilitating local product discovery.

5. Promising Factors Ahead:

   • Rising middle-class incomes.
   • Urbanization fuels organized retail demand.
   • Technology's role: E-commerce popularity.
   • Government support: Policies, tax benefits.

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20 November 2023, Mumbai

WHY India

A Global Textile Powerhouse with a Complete Manufacturing Value Chain

India stands as a prominent force in the global textile industry, boasting a comprehensive manufacturing value chain encompassing every stage from fiber production to apparel manufacturing.

This backward integration grants India a unique advantage in the global marketplace.

The country's commitment to attracting foreign investment is evident in its liberal investment policies, which allow 100% FDI through the automatic route for the textile and apparel sector.

A Heritage of Textile Expertise

India's textile heritage is deeply rooted in its rich history and diverse cultural tapestry.

The country produces a wide spectrum of textiles, from intricate handloom creations and handicrafts to capital-intensive mill products. 

This legacy of textile craftsmanship is preserved with pride and serves as a testament to India's enduring textile expertise.

Navigating Transformation: Innovation, Market Shifts, and Sustainable Practices

The Indian textile and apparel industry is undergoing a transformative journey, driven by radical innovation, dynamic market shifts, and an evolving supply chain landscape.

This transformation is marked by a growing emphasis on responsible and sustainable manufacturing practices, reflecting a global shift towards environmentally conscious production.

Unveiling Growth Potential: Doubling Global Trade Share

As the world's second-largest textile industry, India possesses the potential to double its current five percent share in global trade within the next five years. This growth potential is fueled by India's strengths in traditional textiles and natural fibers, as it stands as the world's largest producer of cotton and the second-largest producer of polyester and silk.

A Catalyst for Change: Employment Generation and Economic Empowerment

The textile industry in India catalyzes change, generating employment opportunities at an unprecedented scale.

For every INR 1 crore ($132,426) invested, the textile industry creates 70 jobs, far exceeding the average of 12 jobs generated by other industries. 

This remarkable employment potential highlights the industry's role in fostering economic empowerment and social progress.

Unlocking Growth Strategies: A Roadmap for Success

This report delves into the current dynamics of the textiles and apparel industry in India, providing insights into the strategies that can effectively harness the sector's growth potential.

By embracing innovation, adapting to market shifts, and prioritizing sustainable practices, India's textile industry can continue to flourish and solidify its position as a global leader.

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18 November 2023, Mumbai

China’s once-unmatched dominance in the global export market for consumer goods has been steadily diminishing since 2016, marked by a shrinking market share.

A major factor contributing to this decline The rising labor costs in China are prompting Western importers to seek more cost-effective alternatives in other countries, particularly for products like clothing and textiles.

• China’s position as the world’s primary source of low-cost goods has eroded, leading many businesses to consider relocating their production facilities elsewhere.
• China’s loss of edge in key consumer sectors

In a fast-changing landscape; China has lost its competitive edge in several key consumer sectors, including apparel and accessories, footwear, furniture, and luggage. 

Exports of other items, such as minerals, hardware, and office equipment, have also experienced a decline.

However, the primary cause for these changes is the escalating political tension that has created a rift between the United States and its Western allies on one side and China on the other.

The situation was further exacerbated by the supply chain disruptions caused by the stringent lockdown measures imposed by the Chinese government to curb the COVID-19 pandemic.

The Ripple Effect of Political Tensions and Supply Chain Disruptions

The political conflict between the West and China has had a significant impact on the global trade landscape. 

The imposition of tariffs and trade restrictions has made it more difficult and expensive for Chinese companies to export their goods to Western markets.

Additional points

Additionally, the pandemic-induced supply chain disruptions have caused delays and shortages, further hindering China’s ability to maintain its export dominance.

The Search for Alternative Production Hubs

As labor costs in China continue to rise and political tensions persist, Western importers are increasingly looking for alternative production hubs in other countries.

Diversification; Southeast Asian nations, such as Vietnam, Indonesia, and Bangladesh, have emerged as attractive destinations due to their lower labor costs and favorable trade policies.

These countries are rapidly gaining a foothold in the global consumer goods market, challenging China’s traditional dominance.

China’s Adaptation to the Changing Landscape

China is aware of the challenges it faces in retaining its position as a leading exporter of consumer goods.

The government has implemented various measures, including industrial subsidies and tax incentives, to encourage businesses to upgrade their technology and move into higher-value-added manufacturing segments. 

Mitigate; Additionally, China is investing heavily in infrastructure development, including transportation and logistics networks, to improve its competitiveness in the global market.

The Future of China’s Consumer Goods Exports

The future of China’s consumer goods exports remains uncertain. 

While the country’s dominance is waning, it still possesses a significant manufacturing base and a vast domestic market.

Way forward: The country’s ability to adapt to changing market dynamics and address the challenges it faces will determine its future trajectory in the global consumer goods export market.

5 key insights :

1. China's export dominance declines since 2016.
2. Rising labor costs lead to relocation of production.
3. China loses edge in key consumer sectors.
4. Political tensions and supply chain disruptions hinder exports.
5. Southeast Asia emerges as alternative production hub.

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16 November 2023, Mumbai

The Confederation of All India Traders (CAIT) is projecting a bright future for India's retail sector, anticipating continued robust growth.
This positive outlook is fueled by several factors, including the upcoming holiday season and a growing preference for domestically produced goods.

Video Insights
Festive Cheer to Boost Trade
India is gearing up for a series of upcoming festivals, including Goverdhan Pooja, Bhaiya Dooj, Chhath Pooja, and Tulsi Vivah. These occasions are traditionally associated with heightened consumer spending, and the CAIT expects this year's celebrations to generate an additional ₹50,000 crore in trade volume.
This surge in spending is likely to be driven by increased demand for traditional attire, home décor items, and sweets and delicacies. Retailers are already preparing for the festive rush by stocking up on inventory and implementing attractive promotional offers.
Vocal for Local: A Trend Gaining Momentum
The "Vocal for Local" and "Make in India" campaigns have gained significant traction in recent years, encouraging consumers to prioritize domestically produced goods.
This trend was particularly evident during the 2023 Diwali sales, when Indian products dominated the market.
The CAIT attributes this shift in consumer behavior to a growing appreciation for the quality and craftsmanship of Indian-made goods. Additionally, the rise of e-commerce platforms has made it easier for consumers to discover and purchase locally produced items.
Looking Ahead: A Promising Future
The CAIT's optimistic outlook for India's retail sector is supported by several key factors, including:
Rising disposable incomes: India's middle class is expanding rapidly, leading to an increase in disposable incomes. This, in turn, is driving demand for a wider range of consumer goods.
Urbanization: With more people migrating to urban areas, the demand for organized retail is on the rise. This trend is creating opportunities for large-format retail stores and shopping malls.
Technological advancements: E-commerce and mobile shopping are rapidly gaining popularity in India, providing consumers with greater convenience and access to a wider variety of products.
Government initiatives: The Indian government has implemented various policies to promote the growth of the retail sector, such as providing tax benefits and encouraging investments in infrastructure.
Bottom line
The CAIT's optimistic outlook for India's retail sector is well-founded.
The upcoming festive season, the growing preference for locally produced goods, and a supportive policy environment are all contributing factors to the sector's continued growth.
As India's economy continues to expand, the retail sector is poised to play an increasingly significant role in driving economic growth and creating employment opportunities.

5 key insights :

1. Festive cheer to boost trade: Upcoming festivals to drive retail sales.

2. Vocal for local: Growing preference for Indian-made products.

3. Rising incomes: Expanding middle class fueling consumer demand.

4. Urbanization: Urban areas driving organized retail growth.

5. Technology advancements: E-commerce and mobile shopping gaining traction.

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20 November 2023, Mumbai

A Resurgent Industry Fueled by Favorable Factors

The Indian textile sector, once beleaguered by the pandemic's economic fallout, has staged a remarkable comeback, as evidenced by the buoyant stock market trends. Major industry players have reported robust financial performances, attracting a surge of investor interest. This positive sentiment is attributed to a confluence of favorable factors:

FTA-Driven Duty Benefits

India's impending free trade agreements (FTAs) promise duty benefits for local textile exports, enhancing their competitiveness in global markets.

Declining Cotton Prices

The recent dip in domestic cotton prices has significantly reduced production costs, boosting profitability for textile manufacturers.

Booming Demand for Home Textiles

The growing trend of hybrid work arrangements and increased focus on home improvement has fueled a surge in demand for home textiles, particularly cotton sheets and terry towels, driving up orders from US importers.

Global Retailers' Inventory Reduction

Global retailers' efforts to reduce inventory levels have created opportunities for larger order placements from Indian textile exporters.

Investor Optimism and Stock Market Surge

Indian textile exporters are anticipating favorable conditions in the second half of the year, fueled by rising demand and favorable market dynamics.

This optimism is reflected in the recent surge of textile-related stocks, with companies like Raymond, Vardhman Textiles, Arvind, Trident, Gokaldas Exports, Welspun, KPR Mills, and Himatsingka Seide witnessing gains of 4 to 12 percent. The acquisition of a 1 percent stake in KPR Mill by Fidelity Investments India in August 2023 further underscores investor confidence in the sector's growth prospects.

Long & Short

The Indian textile sector is poised for continued growth, driven by a combination of favorable policy developments, improving market conditions, and rising investor sentiment.

This revival is a testament to the sector's resilience and adaptability, and its potential to contribute significantly to India's economic resurgence.

5 key insights :

• FTA boosts exports competitiveness
• Lower cotton prices improve profit margins
• Home textiles demand surges due to work from home
• Global retailers reduce inventory, increase orders
• Investor optimism drives stock market surge

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17 November 2023, Mumbai

An iconic retailer of 'British Quality Goods'

Marks & Spencer (M&S), a British multinational retailer founded in 1884, has been on a growth trajectory in India since its foray in 2008. 

The company plans to continue opening new stores and ramp up existing ones in India, with a focus on strengthening the home segment. 

M&S India has been on a growth spurt with operating revenue rising 53% and net profit growing rapidly. 

Lingerie and winterwear have always been the best-sellers for M&S globally and account for a large part of its India revenue as well. 

The company is positioned in the mid-to-premium segment and is the second-largest international operation for M&S outside the UK.

Expanding Presence in India

M&S India currently has over 100 stores in the country and plans to continue opening new stores and ramping up existing ones. 

This expansion is taking place at a time when M&S is closing numerous outlets in its home market of the UK. India is a key growth market for M&S, and the company is committed to expanding its presence here.

Strengthening the Home Segment

One of the key focuses of M&S India's expansion plans is strengthening the home segment. This includes expanding the range of kitchen, bathroom, bedding, and home accessories products. 

Lingerie body care and cosmetics products are also selling well in India, and M&S India is expanding its offerings in these categories as well.

Driving Growth through Online Sales

In addition to expanding its physical store presence, M&S India is also driving growth through online sales. The company sells its products through various online channels, including its website and third-party marketplaces. 

Online sales account for a quarter of M&S India's total sales, and this proportion is expected to grow in the future.

Positioning in the Mid-to-Premium Segment

M&S India is positioned in the mid-to-premium segment of the Indian retail market. This positioning is consistent with M&S's global brand positioning and has been well-received by Indian consumers.

Second-Largest International Operation for M&S Outside the UK

M&S India is the second-largest international operation for M&S outside of the UK. This is a testament to the company's success in the Indian market.

Overall, Marks & Spencer India is a success story in retail. The company has a strong track record of growth and is well-positioned for continued success in the future.

Interesting Points:

• M&S India has been on a growth spurt, with operating revenue rising 53% in 2022 and net profit growing rapidly.
• Lingerie and winterwear are the best-sellers for M&S India.
• M&S India has around 6,000 styles in its versatile product portfolio.
• The company has a strong focus on brand recall and customer awareness.
• M&S India is positioned in the mid-to-premium segment of the Indian retail market.

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16 November 2023, Mumbai

Muted Apparel Demand During Festive Season
Festive-season sales slump for the Indian clothing industry, unlike other sectors. Factors include:
What's What: Inflationary trends and Challenges in Macroeconomics worrying consumers, softening discretionary spending
Changing consumer spending habits are leading people to spend more on other categories, such as electronics and travel.
The industry's competitive and fragmented nature makes it difficult for companies to differentiate themselves and stand out.
Some consumers may be less inclined to keep up with the latest fashion trends, which are constantly changing.
The sluggish clothing sales are having a ripple effect throughout the textile industry, with cotton farmers, ginners, and spinning mills facing challenges due to the reduced demand.
To address these challenges, the apparel and garment industry could consider the following recommendations:
Focus on value-for-money products: Consumers are more likely to spend money on clothes if they feel they are getting a good deal. Companies can offer high-quality, durable, and affordable products to meet this need.
Adapt to sustainable practices: consumers are increasingly becoming more socially and environmentally conscious. Companies can adopt sustainable practices, such as using recycled materials and ethical manufacturing practices, to appeal to these consumers.
Invest in digital marketing: The internet is where many consumers are now spending their time and money. Companies can invest in digital marketing to reach these consumers where they are.
Differentiability: Companies can differentiate themselves by offering unique products or services or by building a strong brand identity. This will help them stand out from the crowd and attract more customers.
Other potential explanations for the decline in clothing sales include increased consumer awareness of their spending habits and the rise of e-commerce.
Recos: However, the suggestions above should help the clothing and garment industry overcome its current challenges and continue to grow in the future.

5 key insights :

1. Economic concerns dampening apparel demand: Inflation and macroeconomic challenges affect discretionary spending.

2. Shifting consumer preferences: Consumers prioritizing electronics and travel over apparel.

3. Intense competition and lack of differentiation: Challenging market landscape for apparel companies.

4. Waning interest in fashion trends: Consumers less inclined to keep up with fleeting styles.

5. Ripple effect on textile industry: Slowdown in apparel sales impacting cotton farmers, ginners, and spinning mills.

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