27 October 2023, Mumbai

WHY INDIA

Foreign investment plays a vital role in the Indian textile industry, providing access to capital, technology, and expertise.
The Indian textile and apparel industry (T&C) is poised for significant growth in the coming years, driven by a number of factors, including the rising demand for industrial and technical textiles, the growing middle class, and the increasing popularity of Indian fashion brands.
The Indian government is also taking steps to support the industry, such as offering 100% FDI in the textile sector through the automatic route.
Nuanced picture
Foreign direct investment (FDI) plays a vital role in the Indian textile industry. FDI provides access to capital, technology, and expertise, which can help the industry grow and modernize.
The FDI equity inflow in the textiles industry, including dyed and printed textiles, adds up to USD 4.16 billion from April 2000 to March 2023.
Kickers
The influx of foreign investment is one of the key factors supporting the growth of the Indian textile sector. The Indian government's approval of 100% FDI in the textile industry through the automatic route is a major driver of this growth. Cumulative FDI inflows into the textiles sector between April 2000 and December 2018 amounted to $3.09 billion.
With its strong domestic market and growing export potential, the Indian textile and apparel industry is a lucrative investment destination for foreign investors.
The industry is also well-positioned to benefit from emerging trends such as sustainable fashion and e-commerce.
Conclude:
The Indian textile and apparel industry (T&A) is on the cusp of a major growth phase.
With the support of foreign investment and government initiatives, the industry is poised to become a global leader in production, exports, and consumption.

5 key insights :

1. Foreign investment boosts Indian textiles
2. Industry poised for significant growth
3. Driven by domestic & export demand
4. Government supports with 100% FDI
5. Bright future ahead

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26 October 2023, Mumbai

World Economic Outlook:

• Global growth is expected to plummet from 6.0% in 2021 to 2.7% in 2023. The World Economic Outlook predicts a sharp slowdown in global growth, from 6.0% in 2021 to 2.7% in 2023.
• The global economy is poised for a significant slowdown, with growth projected to decelerate from 6.0% in 2021 to 2.7% in 2023.

State of affairs

Garments imports decelerated in all key markets in August 2023, compared to the same month in 2022. The largest drop was seen in the US (25%), the EU (23%), and the UK (10%). 

China's market share fell in all four markets, while Bangladesh gained market share in the US, UK, and Japan.

Salient features:

• Global apparel imports are expected to decline by 10-15% in 2023, due to a combination of factors including inflation, the war in Ukraine, and rising labor costs in major exporting countries.
• China's share of the global apparel market is expected to decline from 39% in 2022 to 35% by 2025 as buyers diversify their supply chains and shift to more sustainable sourcing practices.
• Bangladesh, Vietnam, and India are expected to benefit from China's declining market share as they offer buyers competitive pricing, a large and growing workforce, and a commitment to sustainability.

Inference:

Key Insights

1. Manage supply chains
2. Access to products
3. Competitive prices
4. Meet sustainability
5. Consumer demands

Apparel brands and importers will need to carefully manage their supply chains in the coming years to ensure that they have access to the products they need at a competitive price. 

They will also need to focus on sustainability to meet the growing demands of consumers and regulators.

CREDITS: Wazir monthly apparel report

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24 October 2023, Mumbai

Bangladesh's garment industry is diversifying its export markets and reducing its dependence on Europe and the United States, the traditional primary markets. This strategy has paid off, with positive results.

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The share of apparel exports to non-traditional markets, such as Asia, Latin America, Africa, and Australia, is growing and becoming more significant. 

Data points

Data from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) shows that non-traditional markets accounted for 19.3% of the $11.6 billion garment exports in the first quarter of the current fiscal year 2023–24, up from 17.4% in the same quarter last year.

Moreover, garment exports to these non-traditional markets grew by a remarkable 25% year-on-year, while growth in Europe, Bangladesh's biggest market, was only 11.4%. 

In contrast, growth in the United States, the second-biggest market, was much lower, at about 3%.

Bangladeshi garment workers inspect clothes

One key reason for this shift is that exporters are looking for new opportunities as Europe's market is saturated. He also said that buyers in non-traditional markets are shifting away from Chinese suppliers.

The diversification of Bangladesh's garment export markets is a positive development for the industry and the country as a whole. 

It reduces Bangladesh's reliance on a few key markets, making the industry more resilient to shocks. It also opens up new opportunities for exporters to grow their businesses.

The government is supporting the diversification of export markets through initiatives such as export promotion campaigns and trade shows. 

It is also working to improve the infrastructure and business environment to make Bangladesh more attractive to foreign investors.

Set to consolidate its leadership

With its strong track record and the government's support, Bangladesh's garment industry is well-positioned to continue to grow and diversify in the coming years.

Short Point:

Bangladesh's garment industry is diversifying its export markets and reducing its dependence on Europe and the United States. This strategy is paying off, with strong growth in exports to non-traditional markets. 

The government is supporting this diversification through initiatives such as export promotion campaigns and trade shows. 

With its strong track record and the government's support, 

Bangladesh's garment industry is well-positioned to continue to grow and diversify in the coming years.

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27 October 2023, Mumbai

Why India

The festive shopping season in India is in full swing, and the country's economy is poised for growth. A recent study by the Reserve Bank of India showed that consumer spending is essential for the economy, making up 60 percent of the GDP.

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The study also forecasts economic growth of 6.5 percent for this fiscal year.
Apparel retail getting back to normal
A report by CRISIL, released earlier this week, said that apparel retail in physical stores is getting back to normal after the pandemic. The report said that the retail sector is ready for strong revenue growth of 7 to 8 percent in the fiscal year 2023–24.

This comeback is mainly due to the start of the festive season and the upcoming Indian wedding season.
Retailers adding new store spaces cautiously
The report by CRISIL looked at 39 apparel retailers, who together made a quarter of the Rs 1.9 lakh crore revenues in fiscal year 2022–23. The report also pointed out that retailers are trying to balance adding new store spaces.

While they added 3.7 million square feet of retail space across India in 2022–23, they are adding 2.2 million square feet this year, showing signs of normalcy.
Operating margins to stay at 8 percent
The report said that operating margins will stay at 8 percent in 2023-24, as selling more premium products and lower input costs will make up for higher marketing costs.

The report also said that store expansion will cost around Rs 2,000 crore in 2023–24, the same as the previous year.
E-commerce sales are expected to grow 18–20 percent
A report by consulting firm Redseer said that Indian e-commerce platforms will sell around Rs 90,000 crore worth of goods during the festive season, which is an amazing growth of 18–20 percent from last year.
This increase in sales is expected to come from about 140 million shoppers who will buy products from categories such as electronics, fashion, home appliances, and beauty.
Summation:
The festive shopping season in India is a major economic driver, and the signs are positive for this year. The apparel retail sector is getting back to normal, and e-commerce sales are expected to grow significantly.
This is good news for the Indian economy as a whole, as consumer spending is essential for growth.

5 key insights :

• Consumer spending essential
• Economy poised for growth
• Apparel retail recovering
• E-commerce sales to grow
• Festive season boosts economy

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25 October 2023, Mumbai

Why India

India is attracting global apparel brands with its promising growth potential, abundant skilled workforce, competitive costs, growing domestic market, and strategic location.

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Favorable government policies
The Indian government has launched several favorable policies to encourage apparel manufacturing and innovation in the country. Some examples include:
Production-Linked Incentive (PLI) Scheme: The PLI scheme provides financial incentives to companies that set up manufacturing units in India and produce eligible products. For example, the PLI scheme for textiles and apparel provides an incentive of 7% to 11% on incremental sales of eligible products.
National Technical Textile Mission (NTTM): The NTTM is a government-led initiative to develop the technical textile sector in India. The NTTM provides financial assistance to companies for research and development, technology upgrades, and infrastructure development.
An abundantly skilled workforce

India has a large and skilled workforce in the apparel industry, with more than 45 million people working in the textile sector. The government also invests in skill development programs to improve the quality and productivity of this workforce. For example, the Apparel Made-Ups and Home Furnishing Sector Skill Council (AMHSSC) is a government-industry partnership that provides skill training to workers in the apparel industry.
Competitive costs
India offers low-cost production options for apparel brands, with lower wages, land, and energy costs than developed countries. For example, the average hourly wage in India's apparel industry was $0.58 in 2019, compared to $16.2 in the US. This cost advantage makes India an attractive option for brands looking to cut down on production costs.
Growing domestic market
India's domestic apparel market is growing rapidly and is expected to reach $100 billion by 2025. This rising demand creates a huge opportunity for global apparel brands to increase their market share in India.
Strategic location
India's location at the junction of Asia and Africa gives apparel brands easy access to key markets on both continents. Moreover, India has a well-developed infrastructure of ports and airports that enable smooth import and export of goods.
Case studies
Several global apparel brands have already expanded their operations in India, attracted by the country's favorable factors. Some examples include:
H&M: H&M, the Swedish fast-fashion retailer, has been present in India since 2015. The company has over 50 stores in India and plans to open more stores in the coming years.
Uniqlo: Uniqlo, the Japanese fast-fashion retailer, entered the Indian market in 2019. The company has over 10 stores in India and plans to open more stores in the coming years.
Zara: Zara, the Spanish fast-fashion retailer, has been present in India since 2010. The company has over 20 stores in India and plans to open more stores in the coming years.
Opportunities for further growth
India has the potential to become a global hub for apparel manufacturing and exports. However, there are some areas where the country can improve to further boost its appeal to global apparel brands. These areas include:
Infrastructure development: India can improve its infrastructure, such as roads, railways, and ports, to facilitate operations for apparel brands.
Bureaucratic simplification: India can simplify its bureaucratic processes and reduce red tape to make it easier for apparel brands to start and run businesses in the country.
Sustainability focus: India can focus on developing sustainable practices in the apparel industry, such as the use of recycled materials and renewable energy.
By addressing these areas, India can position itself as a global hub for apparel manufacturing and exports.

5 key insights:

• Promising growth potential
• Abundant skilled workforce
• Competitive costs
• Growing domestic market
• Strategic location

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23 October 2023, Mumbai

Why India

India is rapidly becoming a global center for fashion, as shown by its status as one of the world's fastest-growing and most competitive fashion markets.

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The growing interest from global brands highlights this remarkable change.

There are five main reasons why India is so appealing for global fashion brands:
India's population of over 1.4 billion and its expected middle-class of 547 million by 2025 make it a huge opportunity for global fashion brands.
The Indian people show positive spending patterns and high brand awareness, making it a land of possibility for international brands.
E-commerce: The development of e-commerce is expected to support this growth, creating opportunities for fashion retailers and producers.
Rising incomes: increasing brand awareness, along with rising incomes and internet access, motivates consumers to buy quality brands.
Global issues: Global issues have encouraged the international clothing and fashion industry to explore India's growth story, thus extending its global reach.
The fashion industry is valued at around $2.5 trillion worldwide, and India is poised to play a major role in this growing market.

5 key insights:

• $2.5T fashion industry
• India: fast-growing, competitive
• Global brands attracted
• 5 reasons for appeal
• Demographics, demand, e-commerce, rising incomes, global issues

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26 October 2023, Mumbai

Why India

Macroeconomics

India offers a promising opportunity for investors, but to achieve its high aspirations, it needs to leverage the potential of its micro, small, and medium-sized enterprises (MSMEs) in the face of global uncertainties.
Key Points:
India is expected to experience a deceleration in growth in July–September, but overall strength remains.
The services sector experienced its strongest growth in 13 years in July, followed by slightly reduced growth in August and September.
Prognosis

According to IMF projections, India is on course to become the world's third-largest economy by 2027, overtaking Japan and Germany.
India's grand vision is to attain developed economy status by 2047.
India's main growth drivers will be its domestic demand, especially private consumption and investment spending.
Conclusion:
India is facing some challenges, such as geopolitical uncertainties and the global economic slowdown. However, the country's dynamism and its key growth drivers inspire confidence that it can overcome these challenges and achieve its economic goals.

5 key insights:

• Deceleration in Q3
• Services sector strong
• World's 3rd-largest by 2027
• Developed economy by 2047
• Domestic demand key driver

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24 October 2023, Mumbai

Why India

Five D's

Democracy

Demand

Demographics

De-globalisation

De-regulation

Video Insights

India, with its large and growing population, booming economy, and rising middle-class, is a lucrative market for global fashion brands. By 2025, India will have over 1.4 billion people and 547 million middle-class consumers, who are increasingly opting for quality and branded products.

The fashion industry in India is also benefiting from the expansion of e-commerce and digital marketing, which enable brands to reach a wider and more diverse audience.

India's Fashion Industry: Going Global

India’s fashion scene is not only thriving domestically but also gaining recognition and influence globally.

The e-commerce boom is creating new opportunities for fashion retailers and manufacturers to showcase their products and services to the world.

India’s fashion sector is poised to become a major player in the global market with its unique blend of tradition and innovation.

India: A Reliable Partner for Global Fashion Brands

India’s democratic credentials also make it an attractive destination for international fashion brands. As the world’s largest and most vibrant secular democracy, India fosters a stable and conducive business environment. It shares common values with many of the world’s leading economies, making it a reliable partner for reshaping global supply chains and relocating production.

India's Fashion Industry: Responding to De-Globalization

India’s fashion industry is also responding to the challenges and opportunities posed by de-globalization. Globalization has increased competition and affected local artisans in the fashion sector.

This has prompted fashion brands to look for new markets and sources of inspiration in developing and lower-middle-income countries like India. India offers a rich and diverse cultural heritage, as well as a young and dynamic workforce, for fashion brands to tap into.

India's Fashion Industry Outlook: Optimistic

India’s outlook for the fashion industry is optimistic, as evidenced by the entry of numerous international brands into the market.

While some have faced difficulties adapting to the local context, India remains a prominent growth opportunity for the global luxury market.

India offers a stark contrast to the saturated and stagnant Western markets with its vibrant and diverse fashion culture.

In Summary

India is a rapidly growing and evolving fashion market with tremendous potential for global brands.

Its unique blend of tradition and innovation, as well as its young and dynamic population, make it an attractive destination for investment and expansion.

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23 October 2023, Mumbai

Why India

India and the UK are close to finalizing a free trade deal that could boost trade between the two countries by $5 billion, according to a research group. 

The deal is expected to be finalized by the end of this year and will cover most of the goods and services traded between the two countries.

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Nuanced deal

The new deal is expected to be particularly beneficial for sectors like textiles, leather, and footwear, as it will lower tariffs on these goods. India currently exports more than $11 billion worth of goods to the UK every year, and more than half of them are already duty-free.

Historic Moments

The new deal is also expected to boost India's total trade, which crossed $800 billion in the first six months of 2023. Exports grew by 1.5 percent to $385.4 billion during this period.

The free trade deal is a significant development for both India and the UK. 

Boosting Trade & Creating Jobs; It will help to strengthen the economic ties between the two countries and create new jobs and opportunities.

5 key insights:

• Deal boost trade ($5 billion)
• Textiles, leather, footwear (sectors to benefit)
• $11 billion worth of goods (exported to UK annually)
• $800 billion trade (first six months of 2023)
• Stronger ties, new jobs (for both countries)

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