25 February 2023, Mumbai 

Whatever is said and done Indian apparel exports have gradually grown over the past few decades, realizing that it has become possible only with an increased focus on cost competitiveness and global quality benchmarking. Needless to state here the sector has faced different challenges at different times but steadfastly it remains a key contributor to India's economy.

We have to mention here in our paper, albeit challenges galore, Indian apparel exports continue to thrive on account of factors e.g. cost competitiveness, skilled labor, and government steadfast initiatives and the attention this enormous employment-generating sector enjoys.

Context setting

The textiles and apparel (T&C), once a sector that was a vanguard of any nation's economic prosperity and the building block of national economic prospects with most of the advanced economies of the world
The sector is known to have very complicated and long global supply chains and is responsible for generating heavy carbon footprints.
Historically, the sector is known to have been a significant contributor to the economy both generating large-scale employment and precious FOREX, is been earning a dubious status as a declining sector in developed countries, given that the manufacturing shifted gradually to Asian nations which through the years are both survived and thrived through the period of 'Trials and Tribulations'.

The deep dive

The article gives insights into the Indian apparel exports sector getting impacted by developing and under-developed countries in Asia, and global retail scenarios facing extreme challenges.

It has been witnessed that there have been no considerable shifts since November 2022 and recovery is nowhere in sight. Indian apparel exports face stiff competition from other countries like Bangladesh, Vietnam, and China of different levels but continue to grow steadily come what may.

Indian view

The garment industry will make all efforts to achieve the export target of USD 20 billion in this fiscal, Apparel Export Promotion Council (AEPC) urging the GoI as a call to action (CTA) aligning cotton yarn exports and reduce the export benefit of cotton and cotton yarn exports from India to put the sector in the fast lane.

As per industry estimates," Interestingly Textile and apparel (T&C) exports increased to their historic high in FY22, hitting exports worth US$ 44.4 bn Vs 26.2 UD$ bn in FY21 showing a growth of 41%, whilst over FY20 showing 26% growth with net exports worth 32.9 US$ bn".

The good bit is India's readymade garments (RTW) exports have remained stable, with $1.5 billion worth of exports in January 2023, the same as in January 2022.

Albeit there was a 12% increase in exports in January 2021 Vs. In 2022, the US's share of apparel exports has shown a rise of 8% since 2019, while at the same time, the UAE and the UK have registered a drop in share by 3% and 1%, respectively. Giving a quick perspective the UAE and the UK's shares in the total volume of readymade garments (RMG) exports from India in January 2023 were 8% and 9%, respectively in the reference period.

Despite the lack of year-on-year (Y-o-Y) growth in January 2023, in the climate of uncertainty in the West, the argument is that may be considered a blessing that the Indian readymade garment sector is holding out in terms of export value.

The UK

Whilst when it comes to imports, the UK clearly indicated a drop in imports of readymade garments in November 2022 by 4% vis-à-vis November 2021, while imports in 2022 are 18% more in 2021 on a year-to-date (YTD) basis. Little surprise China outshined the list of countries whose exports witnessed an increase to the UK with 6%, followed by Bangladesh and Turkey with 4% and 2%, respectively, since 2019. Important to make mention here that in the same period, India's share dipped by 1%.

US's December 2022 scenario

Over here the US's apparel imports were $6.5 billion, 11% less than in December 2021, while imports in 2022 are 22% more than in 2021 on a year-to-date (YTD) basis. Noticable here is; China's share in the US market shrunk by 8% since 2019, whereas Vietnam and Bangladesh's shares have risen by 2% and 3%, respectively.

Japan

December 2022, Japan's apparel imports stood at $1.8 billion, which is equal to that of December 2021, while imports in 2022 are 5% higher than last year on a year-to-date basis. Bangladesh's and Cambodia's share increased in Japan's apparel imports by 1% each, while China's share dropped by 2% compared to 2019.

The EU

The EU's apparel imports in October 2022 were 14% more Vs in October 2021, notable is the higher percentage is all attributable to price inflation and favorable low base value. Whilst in the EU apparel market, China's share rose by 1%, whereas Bangladesh's share increased by 4% since 2019. Interestingly Bangladesh is gaining ground at China's cost in the EU market proving the adage," someone's loss is someone's gain".

January 2023: The US & the UK

There is a bit of consolation for the high retail growth in the US and the UK in January 2023. Reflecting the numbers the US's monthly apparel store sales were projected at $18.2 billion, 47% more than in January 2022, while sales were 7% more than in 2021.

Whilst the US's monthly home furnishing store sales were estimated at $5.2 billion, 6% more than in January 2022, while sales were 1% more than in 2021. In the fourth quarter of 2022, online sales of clothing and accessories clocked a growth of 5% against the corresponding quarter in 2021, and overall sales rose 7% Vs 2021.

Sharing the perspective of January 2023; the UK's monthly apparel store sales were £3.1 billion, 19% higher than in January 2022.

Long and short

Towards the end, the helicopter view of the Indian apparel exports sector presents a good showing broadly on the back of industry commitment & unwavering focus on sustainable and value-added/value accretion products.

If our industry plays the right cards, there is a big vacuum to be filled especially since China is vacating space, anti-China sentiments & China + One policy globally are starting to play out, and for once India has a real opportunity this time.

With India achieving $ 400 billion in merchandise exports, Narendra Goenka, Chairman of, the Apparel Export Promotion Council (AEPC) hopes, "India will become the world’s garment factory in the next three years. The launch of new schemes like RoSCTL, PLI, and PM-MITRA will increase the production, employment, and export capacity of one of the largest employing sectors with a maximum women workforce.

The council has launched several initiatives to promote the brand India on various global platforms by showcasing its strength in sustainability, ethical sourcing, manufacturing, labor standards, and women's employment" he adds.

Albeit not to say no industry in this highly globalized & interconnected world can be decoupled from the global contagion effect of elevated inflationary trends, surging costs, and stiff global competition that persists.

CREDITS: The Wazir February 2023 Report

Latest Textile Events

21 February 2023, Mumbai

The formerly labor-intensive textile sector has transformed on the back of the steady adoption of AI and the internet of things (IoT). Nowadays, broadly it has been experienced that most textile companies use computerized equipment, which is far more effective than human laborers in producing precise patterns on a large scale.

Every day, new innovative apparel/clothing products are developed. Smart textiles can track and transmit the wearer's information, including biometric data like blood pressure, heart rate, sweat, temperature, and more, by integrating AI with technologies like Bluetooth Low Energy (BLE), edge computing, and cloud data.

Textile production is labor-intensive, which is predominantly a low-not-so-high fixed capital investment; characterized by a range of product designs and, hence, requisite input materials; variable quantum of production; the fierce need for competitiveness in the sector where there is the quantum of existing players across segments.

Semantics

The core idea of delving into the possibility of automation AIs of the world replacing human element will be orchestrated by, the labor-intensive processes, methodology as a pre-condition needs to be converted into automated processes achievable only by nothing else but the use of computers, tailored models, specified digital components, and artificial intelligence (AI)/IoTs to optimize production processes, reduce costs, and improve product quality.

Unleashed Technologies

This article will look at novel applications, how AI affects the textile industry, and why ultra-low-power (ULP) technologies are necessary to unleash AI at the endpoints.

AI is revolutionizing the whole manufacturing process and business practices for textile businesses. AI can access and gather past and current operational data, offering insights that can increase operational effectiveness.

It is simpler to adjust procedures to maximize the talents of human workers when you have a thorough understanding of your operations. AI impacts every process step, whether product cost, textile production, quality control, just-in-time manufacturing, data collecting, or computer-integrated manufacturing.

Defect identification, pattern inspection, and color matching are some frequently used AI applications in textile production.

Smart Apparel and its advantages

Smart garment/clothing and electronic sensing technologies like fitness trackers can help users lead healthier and more attentive lives. Yet, smart clothing can offer more physiological signal assessments since it has a broader area of contact with your body than a device like a smartwatch. Important biometrics, like our heart rate, may be continuously monitored with the help of smart clothes.

The possibility of long-term monitoring makes it easier for doctors to recognize or classify potential heart problems. With frequent monitoring over a longer time, smart clothing assists patients in gathering complete and comprehensive heart-related data, tracking long-term heart illness, and improving the identification and diagnosis of heart disorders.

AI in The Textile Industry

In addition to having a significant fixed capital investment, a broad range of product designs and input materials, unpredictable production volumes, high levels of competition, and frequently high demands on product quality, the textile manufacturing business is labor-intensive. Automating labor-intensive operations using computers, models, digital components, and artificial intelligence is the best way to meet these needs (AI). Artificial intelligence (AI) study focuses on creating and evaluating intelligent computational entities.

This proposition describes several uses of AI in the textile manufacturing sector. Moreover, it incorporates several AI techniques in producing textiles and clothing, such as expert systems, neural networks, fuzzy logic, evolutionary algorithms, and others.

Labor importance in the sector

Many of the world's most significant fashion, clothing, and apparel brands appear to have a sizeable portion of their products manufactured in Asian nations such as China, India, Bangladesh, Vietnam, etc., suggesting that garment and textile manufacturing has historically been a labor-intensive industry.

Over the previous two decades, when labor prices in Asian nations started to rise, a significant portion of the textile manufacturing industry's shift to the East occurred (notably China). Industrial automation is becoming more prevalent in the textile manufacturing sector, and companies with access to operational data from the past and present may use AI to boost productivity and expand the skill sets of their human employees.

Business case

AI adoption in the labor-intensive textile sector can definitely improve efficiency. To play devil's advocate machine learning algorithms can optimize material usage and detect defects, while robotic automation can take away jobs thus reducing reliance on manual labor.

Moreover, predictive maintenance can help minimize machine breakdowns, improving efficiency bar and uptime. There is merit in the argument that AI adoption can lead to a definitive enhancement in profitability and improved competitiveness in the industry.

The application of AI in the textile industry has the inherent possibility to transform a labor-intensive sector by sector super efficient and cost-optimization. The application spans the spectrum of fabric design to quality control, there is little surprise that AI can augment every step of the textile production process.

Considering the clear-cut upside, the adoption of AI in the textile industry is highly likely to amplify & step up in the coming years. Textile companies are nowadays started to well-leverage AI-powered systems to automate the design, prediction, and analysis of textile manufacturing, only resulting in substantial & meaningful gainful situations for the industry.

Latest Textile Events

Indian handloom artists are an integral part of the country's rich vibrant, cultural lineage/heritage. They have been weaving intricate and exclusive varieties of fabrics for generations, using time-old traditional techniques passed down from generations, and are transitioning now from traditional to modernity as digitization touches a range of spheres of manufacturing processes all across.

Introduction

However, despite their incredible inherent talent, skill, and immense contribution to the Indian economy, handloom artists are posed with severe existential challenges now.

Dampeners; Amongst a variety of factors that affected the livelihoods of these artisans with earning multi-decadal low can be attributed; The lack of government support, competition from inexpensive machine-made versatile fabrics, and the unprecedented Covid-19 pandemic's battering impact on the Indian textile industry. Therefore, today it is business imperative to recognize/reward the value of handloom art and help support and promote these artists by highlighting their work, enabling them with fair minimum wages, and preserving their timeless traditional techniques for the generations to come.

About Birla Cellulose

A company that produces sustainable and eco-friendly fibers for global textiles. As part of a bigger corporate purpose it is fully committed to helping produce sustainable fashion, company has consistently undertaken varied initiatives to help promote & support the handloom industry in India.

Outlining one of these key initiatives entails conducting seminars to counsel, educate and engage with handloom artists as a grounds-up exercise. Through a series of seminars, Birla Cellulose has held clearly aims to provide handloom artists with the latest knowledge and skills in their field. Through these interactions & personalized engagements, the company attempts to provide information on sustainable textile production and phenomenal service, providing them with raw materials and technical assistance to produce high-quality textiles for the trade by counseling them to work out ways & means to lessen/reduce the environmental impact their work leaves.

With the theme of empowering handloom these artists support the livelihoods besides helping imbibe with these skills, Birla Cellulose expects to contribute to bringing life back to the Indian handloom industry creating beautiful and sustainable textiles for years.

Right initiative at the right time

Birla Cellulose, in partnership with regional organizations, has lately launched an initiative/movement to sensitize raising awareness about the definitive advantages of using sustainable fibers like Viscose, Modal, and Excel in handloom weaving at a time when sustainability theme is making the right noises.

By introducing these fibers to the weaver community, Birla Cellulose (maker of LIVA which is a new-age fabric from the Aditya Birla Group that contributes to a more sustainably produced fiber ) aspires to value offer a natural and cost-effective substitute to conventional fibers and preserve the profound, rich cultural heritage of the Indian handloom textile industry as an underlying cause.

Short point; Here it is important to outline that," Birla Cellulose has trained 1500 artists across seven states and supplied 5.5 lakh worth of yarn annually proving a point.

Getting Things Done

In the spotlight is Birla Cellulose's R&D center's active engagement galvanizing in the earnest to develop new yarns and fabrics, chugging along with helping commercial manufacturers develop new bases for printing with the latest, strategic in-demand yarns or altering the weaving patterns as price remains the bottom line.

Vocal for Local

As part of the Vocal for Local campaign gathering pace in the Indian manufacturing eco-system, the Birla Cellulose's Liva team has supported/assisted printers aligning with grey base manufacturers to avail quality fabric ensured at the right price.

Incrementally, with pre-production support, Birla Cellulose galvanizing extending its expertise, giving insights & more importantly assistance to post-production preconditions like tagging, online and offline market connect, roadshows, and door-to-door promotions amongst a series of activities underway, supporting the weaver community with a robust supply chain and consistent delivery of quality yarn helping enterprises generate inquiry leads.

Bottom line

The Birla Cellulose initiative will not only resurrect the industry but also has a clearcut objective of assisting the handloom sector aligning its growth with the improvement in the lives of connected artisans, leading to the realization of the "Make in India vision" envisioned by the state for the handloom sector thus preserving India's cultural heritage.

In summary, the future of the Indian handloom sector and artisans looks bright as there is a growing demand globally for sustainable and handmade products going forward. The actors & multi-stakeholders like government and non-governmental organizations are also visibly taking directional initiatives to boost, promote and support this sector.

Albeit, odds such as lack of market access and timely modernization are key needs to be addressed to enable a sustainable future for the artisans.

24 February 2023, Mumbai 

Throughout the world, this year has been a turning point for businesses, brands, and sectors. Due to limitations, conventional business models have become inefficient due to the coronavirus epidemic followed by the outbreak of the Russia & Ukraine wars.

There is no exception in the high-end fashion sector.

Historic perspective

In hindsight the apparel industry has been impacted by global slowdowns throughout history, leading to a bunch of challenges such as decreased demand, production cuts, and job losses.

Stepping back before the epidemic, luxury brands were expanding steadily. As per a press statement from the company, LVMH Moet Hennessy Louis Vuitton, one of the world's largest luxury goods groups, reported sales of 53.7 billion euros in 2019, an increase of 15% over the previous year.

Given the state of the economy Post-Covid, it's visible that 2022 was different from those numbers, especially since many consumers have moved their priority to buying basics and shopping more wisely, per Accenture research from April till the war between Russia & Ukraine broke out leading to very difficult economic conditions.

India's economic cycles have closely mirrored those of Western nations in some of the sectors but in many others, the economy has shown signs of resilience. Reduced demand for Indian products overseas will be the most significant and immediate effect.

Broader outlook

The US and EU are the two top export destinations at 18% and 15.4%, respectively, of India's merchandise exports in fiscal 2022. Except for a minor increase in November and December, which could reflect holiday demand near the end of the year, exports to these two areas have been on a downward trend since July 2022.

In 2023, when the peak effects of synchronized monetary policy tightening across major economies appear, global economic activity will be predicted to slow.

Across the world: Layoffs and restructuring

There were layoffs in the textile and garment sector in numerous Indonesian provinces. According to Firman Bakrie, Executive Director of the Indonesian Footwear Association (Aprisindo), the demand for shoes in Indonesia has declined at least since July 2022.

Indonesia's apparel garment and textile sector (T&A) is still expanding due to the delay in data gathering on exports of such items. Also, this results in the improper recording of the number of employees affected by layoffs.

The layoffs also happened in Subang, West Java, where Yenni Nuraeni, the head of the Subang manpower agency, said that 25 garment firms in Subang had laid off almost 10.000 people.

Sariat Arifia, a representative of the West Java Textile Entrepreneurs Association (PPTPJB), added that the capacity and staff of the garment sector had both been cut by 50%. 90.000 people were laid off due to the closure of 18 garment manufacturers in West Java, according to data from PPTPJB.

In August 2022, there were 1,13 million workers in the textile sector, down to 1,08 million, according to Statistics Indonesia's study. The decline in demand from international consumers is due to Indonesia's textile and clothing sector experiencing widespread layoffs. Apindo Aloysius Santoso, the vice chair of labor affairs for the Indonesian Employers Association, predicts that until mid-2023, the demand for textile and apparel exports from the US and European markets will likely fall by 50%.

People cut back on their purchases of textiles and apparel/clothing (T&C) items that are not considered essential goods due to the rising inflation brought on by the increasing price of staple goods.

Due to this, the previously sent textile and apparel items have yet to be fully absorbed by the market, resulting in an export surplus in the countries of destination, ultimately lowering the number of orders to the textile and apparel sector.

Indian perspective

A story of India changing.

There is merit in the argument that" The fear of layoffs in the Indian apparel industry is overdone". Considering the industry has shown resilience and quick adaptability during & post-pandemic, and is on its way to growth.

According to a report by McKinsey & Company, the Indian apparel market size is projected to keep growing at a decent compound annual growth rate (CAGR) of 11-12% through coming years, expected to expand to $141 billion by 2026. Some of the major players in the Indian apparel sector include Reliance Retail, Aditya Birla Fashion, and Retail, among others, which are bullish about the near and mid-term future.

Green growth; Secular growing trend towards sustainability and ethical & responsible manufacturing, good practices, the pursuit of green products adopting eco-friendly practices, such as using organic cotton, resources consciousness like reducing water usage, and reducing solid waste are all key growth pillars of the Indian apparel sector. Digitization theme too is playing out to keep the momentum going in the Indian apparel sector.

Though the climate of uncertainty can spoil the party with the fear of slowdown, and impending recession in the western world.

The market becoming increasingly competitive, with both domestic and international players vying for a share of the market only sharpens the existing players becoming more competitive, leading to a greater thrust on quality, design, and innovation, as players seek to differentiate themselves to stay afloat.

Joining the dots

India is going to be the new China.

Way to growth; Sector has shown resilience, and quick adaptability during & Post-Covid, it is a better place due to rising consumer demand and economic recovery.

As we are chugging along the Indian apparel sector has been conspicuously witnessing a firm trend in the direction of modernization, automation, and technology upgrades, resulting in falling prospects for low-skilled jobs.

Not to say this completely closes doors, still there exists a demand for skilled workers in a range of areas, for instance, designing, merchandising, and in the marketing side of the business.

Businesses are necessitated to consistently invest in training programs to upskill,re-skill & new skills in their existing workforce.

Prescription

Given that the country’s domestic market is forecasted to reach $100 billion by 2025. The sector is well-positioned for continued growth and innovation as the sustainable growth mantra is; to keep promoting & investing in sustainable practices, invest in skilled labor, up & new-skilling of the workforce sustainably, and prioritize workers' welfare over profits to avoid layoffs in the years ahead given that the country’s domestic market is forecasted to reach $100 billion by 2025.

Given that India is not a country it is a continent with a homogenous democracy. 

There is a case of re-imagining the Indian Apparel sector when impending slowdown, a looming risk of recession in advanced countries, the fragile economy with a cloudy global economic outlook, and the syndrome of layoffs in tech slowdown coupled with muted growth, by promoting sustainable and ethical fashion, embracing technology and innovation led business models, and rightly staying invested in skilled labor to create green quality products.

Latest Textile Events

 16 February 2023, Mumbai

According to Allied Market Research, the global online clothing rental market is predicted to reach US $ 1,856 million by 2023, rising at a CAGR of 10.6% from 2017 to 2023.

The millennial generation has done an excellent job of communicating that ownership is significantly overvalued.

Value unlocking; The Indian apparel rental market is on a path of growth providing end-consumers with affordable, sustainable, and catchy/trendy fashion choices & value offerings. It also enormously benefits the environment by lessening/reducing textile waste which is a big plus.

Playing the devil's advocate

In the times of shared and pooled, economic themes such as shared office, shared mobility, and so forth Post-Covid era there is a sanguine emerging trend towards the direction of renting clothing rather than permanent ownership of a range of designer product lines, fashion accessories & categories.
The paper is a serious thesis on an unleashed evolving, revolution sweeping across retail business models that
concomitantly serves rental and sales markets.
As there is an emerging megatrend of many a retailer predominantly concentrates on renting leading to a heightened incidental sales demand thereby.

Share a theme

According to a study, several sectors of the sharing economy are expected to be as big as their conventional equivalents by 2025, making it the newest craze internationally and in India. This has developed so that younger customers now automatically choose the sharing model.

While this strategy has worked well for industries like real estate, furniture, cars, etc., the apparel and accessory segment is currently dominating the market. It makes perfect sense for those who cannot afford premium labels but admires their intricate designs and high quality.

Apparel rental market landscape

And it is expected that India will see a considerably greater growth rate. In India, the apparel rental market is on a growth path showing a growth trajectory with an estimation of a compound annual growth (CAGR) rate of 10.6% between the forecasted period between 2021 and 2026, driven by heightened consumer interest in a sustainable fashion.

The estimated US $ 3–4 billion Indian online fashion rental business has been steadily growing with various established companies and start-ups, including Flyrobe, Rent It Bae, Stage3, The Clothing Rental, and LibeRent others, which are successfully garnering initial investmentApparel rental product categories are rapidly gaining popularity.

The most popular categories span from designer dresses, formal wear, activewear, and high-end accessories like handbags and the other end of the spectrum like jewelry, etc.

A Sustainable Mind

Fast fashion is not sustainable, and to make matters worse, today's millennials' purchasing habits have completely altered such that they need to buy a new outfit for every occasion.

And as a result of their constant search for more affordable alternatives to direct purchase, developing Asian-Pacific countries have seen an increase in the rental sector.

Growth enablers

Around the world, fashion rental websites have popped up, including Girl Meets Dress in the UK, Rent The Runway in the US, and Flyrobe in India. This has caused the segment's growth to accelerate at a never anticipated rate.

The Doubting Mind | Although few people believe that the sharing economy would stop hype consumption, there is still the argument that the market has not yet expanded sufficiently to displace ownership.

Incipient signs

"The Indian rental market is still in its infancy. It will take some time for the fashion rental business to flourish organically because consumers are only recently becoming aware of it and are highly perplexed by the notion. I don't see the end of hyper-consumption anytime soon, and there will be the coexistence of fast fashion and rental industry in the times to come, affirms Shilpa Bhatia, Founder of The Clothing Rental.

We are quickly moving into an age where attention span is often limited, and the audience craves freshness, newness, and quick ease. Despite a massive increase in start-ups, the industry is still in its infancy.

Global scenario

Stepping back, North America, which accounted for 40% of the global market in 2017, is the market leader in the sector, followed by Europe and Asia-Pacific, which is predicted to grow at the highest CAGR of 11.64% over the forecast period. Bollywood significantly impacts the Indian fashion rental market, further driven by the wedding sector because dressing up for special events is a status symbol for ambitious India.

Social media influencers

Great aspiration to have; Millennials' apparel/clothing and fashion needs have changed from need-based to aspiration-based. Consumers today are either genuine social media users or die-hard Bollywood fans.

Their sartorial choices are more influenced than ever by the nation's top designers and celebrities' closets. Several elements influence this section. The increasing use of social media has made wardrobes more vulnerable than ever, and there is a growing interest in sustainability by using existing resources rather than producing new clothing.

Millennials and Generation Z (Gen Z) value experiences over possessions and believe ownership is about access rather than possession itself. Additionally, according to Sabena Puri, CEO & Co-Founder of Stage3, "the fashion rental websites assist designers with an exponential expansion in market size, providing access to a younger customer base as well as visibility in Tier-2 and Tier-3 locations."

Fast forward

At Rent It Bae, the spokesperson enumerated,” We provide a wide selection of clothing and accessories from well-known brands, including high-street and premium labels.

An in-house brand was chosen by our stylists and offered distinctive designs that are rarely seen in the market. Our target audience comprises people between the ages of 20 and 45 who earn at least Rs. 2 lakhs per year”.

The fashion rental companies offer products in both ethnic and western categories for men and women, ranging from tuxedos, sherwanis, kurtas, shirts to shoes and accessories for men, and lehengas, sarees, gowns, dresses, workwear, footwear, clutches, and jewelry for women.

These products are sourced from aspirational brands, upcoming and established designers, and high-end stores. These excellent collections may be hired in as little as three hours for a minimum of three to four days, and the rental fee ranges from 10-15% of the item's original price.

Canny business Or ethical idiocy
The article makes a case that there is a viable market for the apparel/fashion rental businesses albeit, given the incipient signs it is still an underdeveloped market and in the structural sense it clearly means diverting fashion-conscious/forward consumers veering from the stereotypes of ownership behaviours aligning the deeper aims societies aiming to attain circular economy fashion discipline; galvanizing the idea of sharing collective resources, a noble spirit of social aspects of access, the tenet of shared-values and meaningful win-win approach within the system fostering/stoking in the limited sense alternative consumption practice regime.

Latest Textile Events

27 February 2023, Mumbai 

One of India's oldest businesses, Indian textiles have a rich history dating back to ancient times, with a diverse range of techniques and styles. The sector enjoys a clear-cut credible distinction of playing a considerable role in building India's economy and cultural identity.

The textile sector includes a variety of sub-sectors. The industry is split between a capital-intensive organized mill sector on one end and a hand-woven, unorganized part on the other.

Quick background

Indian textiles inherently offer a range of advantages, from enjoying a rich cultural heritage and vibrant diversity of designs to historically skilled craftsmanship, frugal cost-effectiveness, and an embedded spirit of sustainability. The country's plentiful availability of raw materials broadly being a complete supply chain, as in the larger scheme of things having cotton, silk, and jute, also adds to its competitive edge/advantage.

We have to state here that, Indian textiles have a global reputation for quality and durability, making them a preferred supplier/partner option among global buyers/consumers.

Factsheet

As per industry estimates second-largest employer in the country The world's largest producer of cotton and jute and the second-largest producer of silk The world's top producer of silk, man-made fibers Contribute around 5% of India's GDP and 15% of its total exports Contributes about 14% of industrial production and 3% of the nation's GDP Industry is responsible for up to 21% of all employment created in the economy

India exported $41 billion of textiles in the calendar year 2021, with a CAGR of 2.7 Contributing about 8% of the total excise taxes collected Exported $41 billion of textiles in the calendar year 2021, with a CAGR of 2.7 MoT has set a target before the sector to accomplish textiles exports of 100 billion USD & expects textile industry increasing to $250 billion in the next 5-7 years Sector boasts of 70 jobs for every crore rupee invested Technical textile industry is valued at ≈USD 19 billion and is expected to grow reasonably at 12% annually.

The textile industry's current market size as per reliable sources is worth USD 160~ Bn projected to hit 350 Bn by 2030 contributes ~ 2.3% to the nation's overall GDP, whilst accounting for a very significant 11% to India's total manufacturing GVA moreover what is not generally highlighted is the contribution accruing from a cotton sector that says roughly 6.5 million Farmers are engaged in Cotton Production

A solid 10% of the country’s total merchandise exports go by the overall exports basket of India. Technical textiles are one of the areas of this business that has drawn a lot of interest from all around the world. Technical or engineered textiles are used in various industries, including automotive, civil engineering and construction, agriculture, medical, transportation, industrial safety, sports, and personal protection, for practical rather than aesthetic reasons.

There are 12 categories of technical textiles based on usage. The production of technical materials mainly involves using specialty fibers like Nomex, Kevlar, Spandex, Glass, and Carbon, among others. These fibers have increased functional qualities, such as more extraordinary tenacity, superior insulation, heat resistance, chemical resistance, etc. These high-performance fibers are used in various industries and applications as a result.

Downside

Context setting; All is not hunky dory here in India's textile space, once upon a time the sector which was construed to be a global leader is losing its sheen/colour owing to ever-increasing competition and lack of innovations required to keep its growth and help maintain its existing status.

This does not surprise many given the backdrop of the Indian textile industry's declining/dwindling investments due to challenges key amongst them are increasing costs, use of outdated technology, and lack of skilled labor/reskilling/upskilling/new skilling.

Again, what is depressing is the unimpressive performance on attracting FDI as the industry has badly struggled to attract significant foreign direct investment (FDI) on account of falling to reform labor regulations and a lack of cutting-edge infrastructure, and the sector continues to be LAGGARD.

Differentiability

PLI Scheme for textiles is designed to fuel & spur the sector's growth prospects augmenting India's Textile Sector producing capabilities and harnessing exports' heft with an allocated capital outlay of Rs 10,683 crore through the next five-year period we have to stress here that it has been the game changer in some of the sectors where PLI schemes have been introduced. 

The announcement of operating instructions for the PM Mega Integrated Textile Region and Apparel (PM MITRA) parks programs is another catalytic action undertaken by the government wherein, the parks' locations will be chosen based on five criteria: proximity to the site, existing textile ecosystem, utility availability, etc.

Ministry of Textiles' concerted efforts to skill the labour force in textiles and technical textiles value chain under SAMARTH is also a right scheme in the right direction. 

RoDTEP for woven fabrics of artificial staple fibre's present treatment is as per the Ministry of Textiles (MoT) framework it has been raised up to 2.5% from hitherto prevailing rates of 1.2% which is a solid measure favoring the sector. The revised RoDTEP rates have been made effective in the time window of January 16, 2023, to September 30, 2023.

National Technical Textiles Mission (NTTM) The government cleared earlier 20 strategic projects worth 730 crores in the areas of specialty fibres and geotextile.

In the Union Budget 2023, an outlay allocation of ₹ 900 crores has been proposed for the textiles & apparel sector (T&C) under the Amended Technology Upgradation Fund Scheme (ATUFS).

Global tailwinds

Can India pull it off as the 'China Plus One Global Strategy' is putting India on an Upward Growth trajectory provided all the hands are on deck?

Prescription: Provided all the hands are on deck, as no choice but to elevate your game to global benchmarks.

There is unanimity amongst many trade experts/observers that an emerging geo-political situation where GSCs (Global Supply Chains) are looking to move away from undisputed industry leader China can be growth accretion leading to an increase of probably 7.5–10 million new jobs.

The argument rests on India's more deep strategic bench compared to Vietnam or Bangladesh, the optimistic view is say roughly $16 billion, which may come from the China Plus One sentiment down the road".

The market trends and the various challenges

Spotlight on technical textiles; According to estimates, India's technical textiles industry is expanding at a decent 12% annual pace. It is necessary to take a proactive approach to market expansion/go-to-market (GTM) strategy, promote the use of technical textiles in different government schemes and programs, and raise awareness among the populace and institutions in the nation to realize the potential for nearly 20% annual development in this sector.

The global market for technical textiles is predicted to increase from USD 177 billion in 2018 to USD 220 billion in 2022. With a 23% market share, the United States leads the globe in both production and consumption of technical textiles, followed by Western Europe (22%), China (13%), and Japan (7%). India accounts for around 4-5% of the global market for technical textiles.

With China as the market leader, Asia has emerged over the past ten years as a significant region for producing and consuming technical textiles. The other major participants in the Asian continent's technical textile industry are Korea, Japan, India, and Taiwan. Developing specialized high-performance fiber, advanced technology, and cutting-edge production facilities are expensive requirements for manufacturing technical textiles. China has already acknowledged the value of technical textiles for the home market and exports and has taken the required steps to develop significant capacity in this area.

How do the finances look

Domestic demand is also increasing in India. Indian businesses have begun creating technical fabrics for autos, safety-related materials like those used by troops in combat situations, ballistic fabrics, etc.

India's technical textile exports in 2021-22 have been on a steady rise, with significant growth in areas such as medical textiles, protective clothing, and geotextiles. India's technical textile exports in 2021-22 surged by 8.2% to reach $2.14 billion, driven by demand for medical textiles.

Piyush Goyal, ‘India eyes 5X exports of Technical Textiles from $2 bn to $10 bn' in 3 years

Technical textiles are in a sweat spot; the Indian technical textiles industry is expected to grow significantly in 2022-23. With increasing demand from sectors such as healthcare, automotive, and construction, the industry is projected to generate exports worth $40 billion by 2025.

This growth is driven by factors such as government initiatives, technological advancements, and rising consumer awareness about sustainable materials. Most of the MSME sector in India's technical textile industry needs foreign exposure to embrace new technologies and introduce them to the domestic market.

Utilizing cutting-edge technology, pursuing foreign partnerships and joint ventures (JVs), forging close ties with the nation's technical institutes, increasing investments, and expanding the domestic market to spur demand for technical textiles are some additional steps that must be taken for the sector to grow in the nation.

The debate of Traditional Textile Vs. technical Textiles

There is little doubt that there is a bullish outlook presently as Technical textiles are the growth enabler/kicker in the Indian textile sector. Again, considering their specialized properties, applications, and use cases they offer the differentiated potential for innovation, improvisation, and diversification.

Here it is imperative to mention traditional textiles, technical textiles cater to niche/specialized markets, and their collective demand is not impacted by fluctuations in fashion trends. Precisely this is what makes them a sustainable and profitable segment for the Indian textile industry per se.

Sum and substance

The article makes a case that, the Indian textile industry is not a sunset sector presently. As always it remains a bedrock of the nation's industrial landscape, with economic pie/GDP being a vital contributor to the generating jobs, economic kicker and multiplier Indian economy, and growth pillar/catalyst for foreign exchange earnings (FOREX) being a great example of Atam Nirbharta/Make in India theme.

Not to undermine the fact that the sector is facing challenges & threats such as competition from competing countries and muted & fluctuating global demand in the face of fragile global economic health.

Defensible; The good bit is that what we are excited about is that the industry has shown resilience/differentiable capability and adaptability, making significant strides in technology/digital adoption, embracing Industry 4.0 norms and sustainability measures is the call to action (CTA).

Latest Textile Events

20 February 2023, Mumbai

The literature has extensively discussed the Missing Middle (hence, MM) phenomena, particularly about developing nations. One of the theories contends that medium-sized businesses are leaving the market because they cannot compete. Conversely, small units may be eliminated from the competition before increasing their size and activity.

Given that in countries like India where MSMEs are the backbone of the industry and contribute significantly as a major employment generator across the small and large size-groups of establishments, with a remarkable ‘missing middle’.

The "missing middle" issue in Indian textiles is well described as the lack of mid-sized firms in this sector, leading to impeding growth and impacting employment opportunities.

Prelude

The missing middle issue in Indian textiles refers to the absence of small and medium-sized enterprises in the sector, which creates a gap between large-scale textile producers and individual artisans.

With the government's multiple pro-business initiatives aimed at helping small and medium-sized businesses (SMBs) thrive, financial mismanagement causes many small businesses to spring up to vanish as soon as their requests for financial aid are approved.

In contrast to the units that permanently left, the group of medium-sized firms that persisted has a larger profit margin ratio. The investment turnover ratio is similar in this regard. The coefficients of several financial indicators are shown to be statistically significant for just a few years, which suggests that the association between the likelihood of a business being pulled out and economic indicators is minimal.

Factors leading to the problem

Due to two factors, the MM problem is significant in the Indian setting. There has been substantial worry about two things: first, providing enough work possibilities for the expanding youthful population, and second, addressing the commercial interests of the expanding middle-class population. Since the start of the planning period, India's economic development strategy has focused on industrial development as the primary engine of overall economic growth.

The contribution of the manufacturing sector to general employment and output of the economy has not increased as expected when compared to other major industrializing nations like China and South Korea, despite significant changes in policy strategy from License Raj and public-sector-led growth to market-oriented growth through trade and industrial liberalization during the post-1990s period.

Historical perspective

The Indian economy has emerged from two consecutive quarters of contraction, growing by 0.4% in the three months leading up to December 2020. Yet, there is a catch: the V-shaped recovery may be optical, and a missing middle remains.

This implies that despite a rapid acceleration in growth that has manifested itself as a V-shaped rebound, most analysts think it will never approach the pre-Covid trend line.

This trend line represents the trajectory that the gross domestic product (GDP), the most common indicator of income, would have followed in the absence of the pandemic.

Recovery has undoubtedly been uneven. The most significant source of employment, tiny low-end manufacturing enterprises in the "middle," have not experienced growth, according to experts, who warned that rising gasoline costs and a recent rash of Covid cases in several areas are potential threats.

Restoration steps

To restore at least 14 million lost employment, as predicted by the Centre for Monitoring of the Indian Economy, the reversal must be more widespread. The epidemic more severely impacted services than manufacturing.

The trade, lodging, transportation, and communication services sectors, which make up around 16% of employment, had the most significant service declines. The main obstacle is still a need for more demand. Consumer durables, food, clothes, health, transportation, and education are just a few products and services people spend little on, particularly those in lower-income households.

Deep dive

This impedes the growth and development of the industry, as well as restricts opportunities for small-scale entrepreneurs and artisans to access markets and resources.

A broad-based recovery depends on the health of India's struggling small enterprises, which account for over 25% of the country's GDP and over 40% of its industrial output. According to Joshi, they are the missing middle.

Smaller businesses' revenues were hit harder by the pandemic than more prominent firms, which was the primary source of employment losses. Joshi claimed that domestic demand and commerce dynamics remain unfavorable for small enterprises.

A lack of negotiating leverage and financial constraints have prevented the recovery from reaching labor-intensive areas of the economy.

Latest Textile Events

15 February 2023, Mumbai

A quick perspective; Typically these are a platform to engage the leading importers wherein potential buyers & importers from abroad are invited to the show; and quite a number of times in the Indian textile industry the event is organized under the Market Access Initiative (MAI) scheme/under the aegis of Ministry of Commerce and Industry, Govt. of India to drive the point home.

Generally it has a great probability of success in terms of the participation of potential buyers from abroad and business generation. Thereby, the visiting buyers get a unique opportunity to see the latest products of leading companies in the sector under one roof.

One great example of this media is when,” The 10th and 11th of February 2023 saw the beginning of the journey of a series of "UPNEXT INDIA" reverse buyer-seller meetings, which began with Japan.

In front of foreign buyers and exhibitors, Naren Goenka, Chairman of the Apparel Export Promotion Council (AEPC), and the other members of the Export Council (EC) officially opened the inaugural edition of up next India 2023 today at Apparel House in Gurugram (Dellhi, NCR)”.

Does it lead to supply chain cost savings?

The Ministry of Commerce and Industry uses the Market Access Initiative (MAI) Scheme to promote Upnext India, which AEPC coordinates. 84 influential Japanese buyers, including trading firms and retail chains/stores, were in India to seek their needs from the 112 Indian exhibitors showcasing the wide variety of RMG that reflect Japanese taste.

Naren Goenka, Chairman of AEPC, highlighted the shifting market dynamics by stating, "We hold a substantial business opportunity in Japan, reflected by the fact that China, which has been a significant supplier of clothing to Japan, has seen a decline in the past five years, giving India a considerable advantage.

The apparel industry in both nations is preparing to expand this commerce by utilizing duty-free entry for Indian RMG after the Indo-Japan CEPA agreement, as opposed to an estimated 9% for China and Turkey.

The exercise is designed broadly to invite leading buyers from a range of countries by proxy directly or indirectly and involves the sponsorship of guests in quite a number of cases aiming at enabling a more decisive, constructive, meaningful, and end of it a FRUITFUL VISITATION and, the merit of it cannot be overstated.

VOCAL For LOCAL

The world's most significant supply of cotton, jute, silk, and wool as raw materials is available to the Indian garment industry, which is also home to the second-largest capacity for spinning and weaving.

Quintessential Indian; This presents a chance for the sector to add 95% of value domestically, enabling India to provide the world with a total value chain solution from agriculture to fashion and extending a competitive edge by reducing lead times to reach our buyers.

The Indian clothing sector has advanced to expanding into new MMF garments fields after having established itself in traditional clothes, “Chairman AEPC remarked.

Japanese firms have two competitive advantages as a platform for apparel/clothing sourcing, according to Shri Sudhir Sekhri, Vice Chairman of AEPC, in his speech. These benefits include sourcing cost and flexibility, and agility.

Small customized orders of 300 pieces and big orders of 3 lakh pieces of one type may be fulfilled by Indian vendors. Despite Covid 19, there has been a good increase in garment imports into Japan over the past three years, giving India's apparel sector significant potential”.

"Upcoming India looks forward to forging bridges of collaborations between the Indian exporter community and Buyers globally, commencing with Japan. We hope to help Japanese businesses prepare for further sourcing from India through this event," said Ashok G Rajani, Chairman of Fairs and Exhibition, AEPC.

The Reverse Buyer Seller Meet's Japan-focused 2023 edition hosted interested apparel and fashion accessories exporters as it was a great honor to have discernible buyers offering them a forum to interact with Japanese brands and customers.

Expected outcome

The many types of clothing, including the summer and winter collections, are on exhibit from Indian RMG enterprises. The theme pavilions for startups in the technology and sustainability domains, two critical sectors where the Indian apparel industry is undergoing significant shifts, will also be present over the two days of Upnext India 2023.

In addition, the exhibition will feature several panel discussions where experts, business executives, and academics will debate topics, including trade outlook, ESG compliance, and emerging technologies to help the sector prepare for the future.

Historic perspective

India exported readymade garments worth US$ 0.22 billion to Japan with a share of 0.9% in 2022 (up until November), showing that there is significant room for Indian apparel manufacturers and Japanese readymade garment importers to close the gap and start a new chapter in the India-Japan apparel trade, textiles.

Reference point

The underlying purpose of let us say any Reverse Buyer Seller Meet invariably is to offer an achievable possibility to a prospective/targetted set of importers/buyers to engage possibly one-on-one, closely interact with their counterparts explore business prospects understand mutual needs and requirements as a productive outcome of the initiative thereby, optimizing meaningfully the economic gains.

What is remarkably arguable is," India is in a uniquely good place & well poised to be the next ‘+’ opportunity for the global supply chains as new narrative building in the globalized markets interestingly is discovery mechanism, The Geopolitical Economic Imperative for Reorganising Global Supply making reverse buyer-sellers meet making much-needed, relevant and to the point".

Latest Textile Events