EAI 01 ISSUE 09
100
Impact of Trade War on global apparel sector
GLOBAL BUSINESS OUTLOOK POSITIVE FOR 2019
Yoga pants for work & play
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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APPAREL / CHAIRMAN’S MESSAGE
DEAR FRIENDS,
I
am happy to share that the industry has finally seen some growth in the last one month, with October export figures showing a pick up. After 12 months of stagnation, apparel exports has recorded a positive growth of 36.26% in October 2018, as against Oct 2017 exports. I hope the trend is sustained and the industry finally finds its place in the sun. But the fact remains that the industry is grappling with competitiveness issues, one of which is the lack of a conducive environment for invest and expansion. The short term and ad hoc policy initiatives have not been able to attract the kind of long term vision and investment that the sector needs. In this regard the new MSME package of the Prime Minister may provide a shot in the arm. I would like to extend my gratitude to Hon’ble Prime Minister of India, Shri Narendra Modi for launching Support and Outreach Initiatives for the Micro, Small and Medium Enterprises (MSME). Apparel Exporters which largely comprises of MSME’s will definitely be benefited from the initiatives. The key initiatives include increase in interest subsidy under Interest Equalisation scheme from 3% to 5%, Loan upto Rs. 1 crore within 59 minutes through online portal, etc. The package will ease the credit access for MSME’s. AEPC has partnered with the MSME Help Desk in Tirupur to facilitate the exporters in better understanding and availing of the package benefits. AEPC
under
its
export
promotion
initiative had participated in International Sourcing Expo, Melbourne, Australia and a delegation consisting of senior EC members and representative of Ministry of Textiles also visited with the objective to explore the market potential of Australia. The initial report of the event was very positive. I would like to thank NITI Ayog for organising the First India Russia Economic Forum for Strategic Economic dialogue at Russia, led by Shri Rajiv Kumar, Vice Chairman, NITI Ayog. I am happy to share that apparel trade was one of the focus areas of discussion. Recognizing the potential of the Russian market for Indian apparel exports, it was proposed to set up a target for US $ 1 billion of apparel exports from India by 2020. Given the commitment of leaders of both the countries, I look upon these dialogues as a new window for growth of apparel exports. n
HKL Magu, Chairman, AEPC APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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C O N T E N T S EAI 01 ISSUE 09
100
Impact of Trade War on global apparel sector
GLOBAL BUSINESS OUTLOOK POSITIVE FOR 2019
04 | the broADCASt
Yoga pants for work & play
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
| December 2018
CHAIRMAN AEPC Mr. HKL Magu CHAIRMAN EP Mr. Sudhir Sekhri
India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-September) 2018-19
05 | the broADCASt
India’s Ready-Made Garment (RMG) Export Update for FY (April-October) 2018-19
06 | AepC eVeNtS
AEPC organises ‘Fabric of Unity’ event
08 | AepC mSme report
Government launches Support and Outreach Initiative for MSME
10| mArketS
• India improves its rank in the ‘Ease of Doing Business’ survey • Global sewing machines market to grow at 4.6% CAGR • Global apparel consumption to reach $2.6 trillion by 2025
ADVISOR AEPC Mrs. Chandrima Chatterjee PUBLISHER Apparel Export Promotion Council
12| brAND retAIl
• American Apparel to expand sizing chart • Uniqlo to double store network by 2022 • US retailers to expand operations
13| brAND retAIl
• Adidas increases its profitability outlook • Versace to consolidate operations • Uniqlo A/W sales for October plummets
14 | CoVer Story
US-China trade war could alter the global business map
18 | bUSINeSS Editor-in Chief & Publisher & CEO Sanjay Chawla Director - Salil Chawla Managing Editor - Sujata Dutta Sachdeva VP-Corporate Communications Shraboni Mukherjee Assistant General Manager - Saqib Meer Editorial - Narayan Subramaniam Editorial Asst. - Ranjit Kaur Correspondent - Ajay Kumar Goswami, Special Contribution Editorial - Ajanta Ganguly Supported By - Abdul Hussain, Sumit Masand ART DIRECTOR - Sanjeev D. Sonavane Production & Admn. - Dhansukh Rathod, Dinesh Poojary Mumbai Office: 38/314, Unnat Nagar 4, Off M. G. Road, MHADA Colony, Goregaon (W), Mumbai - 400 062. Ph: 022 2875 5181 e-mail: dfuif@yahoo.co.in / dfu@rediffmail.com Dehli Office: Salil Chawla, Business & Mktg: New Delhi - 110017, Mobile: +9193503 18639/ 95601 79633 e-mail: dfudelhi@yahoo.co.in Printing Press: VIBA Press Pvt. Ltd. C-66/3, Okhla Industrial Area, Phase-II New Delhi-110020 e-mail: info.vibappl@gmail.com
Despite tariff wars, global outlook for clothing, fashion market positive in 2019
20| bUSINeSS
• FDI in Malaysian clothing sector reaches MYR112 million • EU apparel imports rise by over 10 per cent • Bangladesh earns $1.13 billion from trousers
21| bUSINeSS
• Higher growth expected for US apparel and footwear brands • World manmade yarn exports down 36 per cent in Q2 • Germany emerges as the top destination for Bangladesh’s apparel exports
22| trADe treAtIeS
British fashion industry braces up for Brexit and beyond
24| trADe treAtIeS
• US accuses India flouting WTO norms for cotton subsidies • USTR revokes duty-free concessions on 50 Indian imports • India asks China to reduce tariffs
25| trADe treAtIeS
• TPP-11 to lower tariffs on agricultural and industrial goods • RCEP to not be implemented by year end • Sri Lanka to lose GSP access with regime change
26 | proDUCt
Asia Pacific to be frontrunners in global knitwear market by 2026: Study
28 | CoNCerN
Volatile prices, fabric-sourcing challenges big concern for India’s apparel sector
30| CottoN
• World cotton production to decline this year • Global organic cotton increases by 10% • ICF estimates cotton production to be over 370 lakh bales in 2018-19
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31| Import
• Bangladesh apparel exports to India increase • German raw material imports decline by 9%
32 | TIRUPUR
Eyeing US, EU markets, Tirupur knitwear makers set up units abroad
34 | SOURCING
With rising costs in China, Mexico, Turkey emerge strong sourcing destinations
36 | business
China still remains global textile leader
38 | PRODUCT FOCUS
China still remains global textile leader
42 | PRODUCT
Global denim sales to be driven by sustainability initiatives, new trends
44 | AEPC Seminar Report
AEPC Bangalore organises seminar on Strategies for Financial Risk Management for Apparel Sector
45| Compliance
• Accord severs ties with 532 garment companies • UK retailers pledge to stop slavery in textile trade • EU restricts use of 33 textile chemicals
46 | retail
Future retail spaces to offer high-touch, seamless experience: WSGN study
48 | retail
Rising shopping frequency causes dissatisfaction among online consumers
50 | CoMPLIANCE
Fashion industry responsible for 10 per cent of global carbon emissions
52| Sustainability
• CITI evaluation report ranks Levi’s as the world’s top apparel brand • ZDHC program gets seven new members • Higg Facility Modules to address value chain inefficiencies
53| Sustainability
• PHMA urges govt to demand duty free access to Chinese markets • A new approach needed for textile recycling • Brands find selling eco-friendly products difficult
54 | Skiling
Focus on skills development must for apparel industry growth
56 | INSIGHT
Economists, policy makers divided on the need for import regulation
57 | GEMA Report
Vinod Dhawan, President, GEMA shares his plans for the industry
58 | MINISTRY NOTIFICATIONS 59 | GSt Update 60 | AEPC EVENT CALENDAR
CALENDAR OF EVENTS - 2019
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | December 2018
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+++++
AppArel / THE BROADCAST
India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-September) 2018-19 INDeX oF INDUStrIAl proDUCtIoN manufacture of textiles month
mom Growth rate (In %)
manufacture of wearing apparel
mom Growth rate (In %)
2017-18 2018-19 2018-19/2017-18 2017-18 2018-19 2018-19/2017-18
April
116
114.2
-1.6
155.5
134.6
-13.4
may
116.7
116.1
-0.5
156.8
136.8
-12.8
June
116.4
115.5
-0.8
145.2
151.6
4.4
July
116.4
119.8
2.9
134.2
147.3
9.8
August
116
125.1
7.8
121.4
144.3
18.9
September
115.2
121.4
5.4
118.8
143.6
20.9
total April-September
116.1
119.6
3.0
138.7
143.7
3.6 Source: CSO, 2018
SUmmAry • Manufacturing of Textiles has shown a growth of 5.4% in September, 2018 and growth of 3% for the period of April-September, 2018-19 • Manufacturing of Wearing apparel has shown a growth of 20.9% in September, 2018 and growth of 3.6% for the period of April-September, 2018-19
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AppArel / THE BROADCAST
India’s Ready-Made Garment (RMG) Export Update for FY (April-October) 2018-19 India’s RMG Exports RMG exports were to the tune of USD 1130.95 million in October 2018 with the growth of 36.26 per cent against the corresponding month of October 2017, which was USD 830.02 million. In rupee term export for the Month of October 2018 was ` 8327.42 cr. as against ` 5401.86 Cr. in October 2017 with the growth of 54.16 per cent. India’s RMG export to World in the April-October of 2018-19 was to the tune of USD 8847.12 mn. which has decreased by -11.63 per cent compared to the same period of previous financial year. During April-October 2017-18, India’s apparel exports were to the tune of USD 10011.51 mn. India’s rmG export to World month
Fy 2017-18
mom Growth of 2018-19 over 2017-18 (%)
Fy 2018-19
In INr Crore In US$ million In INr Crore In US$ million
INr
US$
April
11272.24
1747.44
8859.67
1349.81
-21.4
-22.76
may
10342.55
1605.37
9040.63
1338.57
-12.59
-16.62
June
9979.57
1548.59
9202.63
1357.46
-7.79
-12.34
July
8262.94
1281.95
8757.23
1274.83
5.98
-0.56
August
8552.24
1336.95
8986.67
1292.18
5.08
-3.35
September
10704.85
1661.19
7967.69
1103.32
-25.57
-33.58
october
5401.86
830.02
8327.42
1130.95
54.16
36.26
64516.25
10011.51
61141.94
8847.12
-5.23
-11.63
April-october
Source: DGCI&S, Kolkata, 2018
AppArel eXpOrT prOMOTION COUNCIl MAGAZINe | December 2018
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AppArel / AEPC events
AEPC organises ‘Fabric of Unity’ event
T
o mark the unveiling of the ‘Statue of Unity’ in Gujarat on October 31, 2018, AEPC organised the ‘Fabric of Unity”, an event to commemorate the Indian textiles industry. Union minister of textiles, Smriti Zubin Irani graced the event attended by AEPC’s EC members, officials from the Ministry of Textiles and senior representatives from textiles councils and associations,
representatives from brands, ETI, ATDC students and NGOs working in this sector.
Integrating the entire industry Incorporated in 1978, AEPC is the official body of apparel exporters in India that provides invaluable assistance to Indian exporters and importers/international buyers who choose India as their preferred sourcing destination for garments. In recent years, AEPC has worked tirelessly to integrate the entire
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AppArel / AEPC EVENTS
industry - starting at the grassroot level training the workforce and supplying a steady stream of manpower to the industry; identifying the best countries to source machinery and other infrastructure and brokering several path breaking deals for members, while helping exporters to showcase their best at home fairs as well as be highly visible at international fairs the world over. Speaking at the event HKL Magu, Chairman, AEPC said “Indian textiles have played an important role in the freedom movement and what can be a better example of unity in diversity than the Indian textile heritage. The Fabric of Unity is an event to celebrate this. This year happens to be AEPC’s 40th year of service for promoting apparel exports around the world. We feel proud to be working on very important initiatives to promote inclusion and sustainable apparel eco system. ” Smriti Zubin Irani, Minister of Textiles said, “AEPC has organised the Fabric of Unity event in which industry, workers, and volunteers took the pledge to work for the betterment of the nation. In continuation of this spirit of the Unity Pledge - to contribute to the nation building as an unified entity, AEPC can take the concept of Fabric of Unity forward by showcasing the rich history of the diverse fabric and textiles traditions of India at AEPC premises.”
Encouraging skilled workers into organised sector Irani highlighted that Prime Minister, Narendra Modi has
AEPC has organised the Fabric of Unity event in which industry, workers, and volunteers took the pledge to work for the betterment of the nation. In continuation of this spirit of the Unity Pledge - to contribute to the nation building as an unified entity, AEPC can take the concept of Fabric of Unity forward by showcasing the rich history of the diverse fabric and textiles traditions of India at AEPC premises gifted a package of Rs 6,000 crore to AEPC to encourage the skilled workers and people into the organised sector. PM Modi also wished the Indian textile Industry to bring about newer heights in the world economy. She hoped AEPC will work hard towards achieving this target. She also requested the extension of the concept of Fabric of Unity to every member and office of AEPC. n
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / AEPC MSME Report
Dr.A.Sakthivel, Vice Chairman, AEPC in the presence of Mr. Kandasamy, GM - District Industries Centre, Mr. Sundaramoorthy, Lead District Manager, Canara Bank, EC Members at MSME Helpdesk at AEPC, Tirupur
Government launches Support and Outreach Initiative for MSME
N
arendra Modi, Prime Minister of India, on November 2, 2018, launched 12 support and outreach initiatives for the Micro, Small and Medium Enterprises (MSME) sector in New Delhi. These initiatives include: • Loan of upto Rs. 1 crore within 59 minutes through online portal • Interest subvention of 2 per cent for all GST registered MSMEs on fresh or incremental loans • All companies with a turnover of over Rs. 500 crore to be mandatorily on TReDS platform • All PSUs to compulsorily procure 25 per cent instead of 20 per cent of their total purchase from MSMEs • Out of this 25 per cent; 3 per cent should be reserved for women entrepreneurs • All CPSUs to compulsorily procure through GeM portal • 100 technology centers to be established at the cost of Rs. 6,000 crore • Govt. of India to bear 70 per cent of the cost for establishing pharma clusters • Returns under 8 labor laws and 10 Union Regulations to be filled in one year • Establishments, to be visited by an inspector, will be decided through a random computerised allotment
• Single consent under air and water pollution laws. Returns will be accepted through selfcertification and only 10 per cent MSME to be inspected • For minor violations under Companies Act, entrepreneurs no longer have to approach court but can correct them through sample procedures
MSME Help Desk to strengthen manufacturing base AEPC set up the MSME Help Desk in Tirupur on November 16, 2018 to facilitate the exporters’ to strengthen their manufacturing base. This help desk was inaugurated by Dr.A.Sakthivel, Vice Chairman, AEPC in the presence of Kandasamy, General Manager, District Industries Centre; Sundaramoorthy, Lead District Manager, Canara Bank, EC members along with officials, exporters, press and media. n
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AppArel / MarketS
India improves its rank in the ‘Ease of Doing Business’ survey
I
ndia’s rank in the Ease of Doing Business 2019 survey’ improved by 23 places to reach 77 among 190 countries surveyed, making it the only country to rank among the top 10 improvers for the second consecutive year. India saw a similar improvement in the “trading across borders” section to 80th position from 146th a year ago. This improvement became possible as the country reduced time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers, upgrading of port infrastructure and allowing electronic submission of supporting documents with digital signatures under its National Trade Facilitation Action Plan 2017-2020. India has registered huge improvement in six out of the 10 indicators and has moved closer to international best practices. The biggest improvements have been in the indicators related to construction permits, in which India’s ranking improved by 129
Global sewing machines market to grow at 4.6% CAGR
G
lobal sewing machine market is expected to grow at a CAGR of 4.6 per cent from 2018 to 2026.The increasing popularity of the do-it-yourself culture is an important factor contributing to the growth. People, in order to give a personalised touch to their garments are increasingly practicing home arts such as sewing and knitting. Asia Pacific is the largest market for sewing machines. The presence of a large number of sewing machine manufacturers headquartered in the region is an important factor propelling market growth in the region. In recent years, sewing machines have witnessed significant technological advancements. Apparel manufacturers are transitioning from manual sewing machines to digital sewing machines. Moreover, sewing machines have been bestowed with a plethora of new features and functionalities. For instance, Kinoshita introduced sewing machines that have automatic bobbin changers. Similarly the sewing machine market has witnessed other innovations in the form of real-time monitoring in sewing machines, modular sewing machines, convertibility in sewing machines, smart sewing machines and digital feed system in sewing machines, among others. Some of the major players operating in the sewing machine market include China Feiyue, Brother, Juki, Jack, Singer, Bernina, Pegasus and Million Special, among others. Research and development is one of the most common strategies adopted by the market players which helps companies stay afloat in the market by addressing the increasing competition. n
points, and trading across borders, in which it rose by 66 points. Areas where the country still needs to improve are starting of business, in which the country ranked 137, paying taxes and enforcement of contracts. n
Global apparel consumption to reach $2.6 trillion by 2025
T
he global apparel consumption is forecast to grow at a CAGR of 4 per cent and reach $2.6 trillion by 2025. Market growth rate of developed countries is expected to slowdown whereas large emerging economies will be the key drivers of growth. China and India, with a large population base, will be the fastest growing markets in the segment. It is expected that over the next decade, domestic apparel market of India and China will attain high growth rates of 11 per cent each, to add a cumulative market size of $393 billion by 2025. Apparel consumption in 2017 is estimated to be $1.8 trillion, which formed around 2 per cent of the world GDP of $79.3 trillion. EU-28 was the largest apparel consumer market worth $400 billion, which was followed by markets of the USA, China, and Japan. These top four markets together constituted approximately 59 per cent of the global apparel consumption. n
10 / APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | December 2018 Oct_shortstories.indd 1
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AppArel / Brand Retail
American Apparel to expand sizing chart
A
merican Apparel, which was relaunched in the US in August 2017 by GildanActivewear, a Canada-based manufacturer, will standardise and expand its sizing to include extra large pieces, lower its prices by up to 23 per cent and offer its previous hits including disco pants, highwaisted jeans and bodysuits. Founded in 1989, American Apparel came under criticism with its provocative advertising that eatured scantily clad women in suggestive poses. The brand still aims to be sexy, but will be careful about its portrayal of women in future. The brand was operating a test store that it will use to study the brand’s traction and potentially pave the way for a return to physical retail. n
Uniqlo to double store network by 2022
U
niqlo is planning to double its store network in Southeast Asia and Oceania to around 400 by 2022. Fast Retailing, the parent company of Uniqlo recently acquired a 35 per cent stake in Hanoi-based women’s fashion brand Elise. The store will be operated by a joint venture between Fast Retailing and Mitsubishi Corporation. Its arrival in Vietnam will intensify competition for foreign brands as Zara and H&M who have already successfully launched there. According to German firm Statistics Portal, Vietnam’s fashion revenue will annually grow 22.5 per cent from 2017 to 2022, and its clothing sales will surge to an estimated $245 million this year. n
US retailers to expand operations
R
etailers in the US, like Macy’s and Kohl’s, are planning to expand their operations through new partnerships and tie-ups. Kohl is planning to downsize its store size to about 60,000 sq ft with the remaining space to be leased to fitness centers or other retailers. Macy’s on other hand will add restaurants and other categories that revolve around the way customers live and shop. The retailer has also acquired a stake in Silicon Valley start-up b8ta, which features different online upstart brands and major labels like Sony at its locations, including an in-store boutique at Macy’s New York flagship. b8ta, which drives traffic and sales by regularly featuring new brands and allowing customers to try and interact with products in out-of-box-setting, is also using its technology to expand the Market at Macy’s pop-up shop concept. Macy’s this year also bought Story, famous for its New York shop that hosts different brands with unique themes. n
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AppArel / Brand Retail
Adidas increases its profitability outlook
D
ue to the strong financial performance in the first nine months of 2018, Adidas has increased its profitability outlook for the year and specified the targeted range for its top-line growth. The company now projects its currencyneutral revenues in 2018 to grow between 8 per cent and 9 per cent at the lower end of the communicated range due to lower-than-initially-expected growth in western Europe. At the same time, Adidas now forecasts its net income from continuing operations to increase between 16 per cent and 20 per cent compared to the prior-year level. The company’s gross margin is now projected to increase up to 1.0 percentage points to a level of up to 51.4 per cent. This, together with the projected top-line growth, is expected to drive an increase in operating profit of between 12 per cent and 16 per cent. The net income of Adidas from continuing operations increased
Versace to consolidate operations
V
ersace will consolidate its operations which will help the company to further develop the Versace Jeans collections while at the same time preserve the DNA and design codes of Versus. The company will discontinue its long-established seconds line Versus Versace and focus on one contemporary range alone. In recent months, Versace examined several ways of streamlining its business model, to enable it to focus on its brand portfolio and ensure it remained innovative and relevant in everything it did. Fashion labels are increasingly streamlining their product range. The era of second and third lines seems to have come to an end. A similar approach has already been adopted by Giorgio Armani, who from spring/summer 2018 redesigned his corporate portfolio around three main labels: Giorgio Armani, Emporio Armani and A/X Armani Exchange. Since 2009, accessible luxury label Versace Jeans has been produced by Swinger, the apparel company which owns the brand Genny and is also a licensee of Cavalli Class. Versace was acquired last September by the US group Michael Kors and is active in the luxury segment with readyto-wear, accessories, jewelry, watches, eyewear, fragrance and home decoration lines. Versace products are distributed via 200 monobrand stores and over 1,500 multibrand retailers worldwide. n
by 19 per cent in the third quarter. Its revenue increased by 8 per cent on a currency-neutral basis and per cent in euro terms. Gross margin increased by 1.4 percentage points to 51.8 per cent. Operating profit was up by 13 per cent in the quarter, resulting in an operating margin improvement of 1.3 percentage points to a level of 15.3 per cent. nw
Uniqlo A/W sales for October plummets
The like-to-like sales of Fast Retailing’s Uniqlo chain plummeted by 10 per cent as did its total sales figure in October 2018. The higher-than-expected temperatures in Japan dented demand for its autumn/winter collection. It also depressed customer footfall and the number of items each shopper who did buy actually went home with. October traditionally has been a tough month for fashion retailers. In 2017, a number of otherwise-buoyant businesses around the world registered negative results for their autumn season as summer-like temperatures continued while their coats and knits appeared on store shelves and stayed there. And the extent of the impact of the ‘wrong’ temperatures can be seen clearly when chains that are otherwise-successful, such as Uniqlo, suffer as much as those who are struggling generally. n
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / COVER STORY
US-China trade war could alter the global business map The ongoing trade war between the US and other countries mainly China is altering business equations amongst nations. Even though it will have less direct impact on Indian exports as apparel and made-up textiles are not included in the currently effective US 301 tariff lists, however, prices of end products are expected to rise
T
he unilateral tariff imposition by the United States on various countries has started a trade war that threatens to adversely affect the world’s major economies. China and the US are currently locked in an on-going trade war as each country has introduced tariffs on goods traded between each other. Although economists feel no country, including the US itself, is likely to benefit from a tariff war, the effects are yet to kick in. During his 2016 election campaign, US president Donald Trump had assured he will fix what he feels is China’s abuse of the broken international system and unfair practices over many years. Along with protecting US jobs for Americans, he also plans to wipe out US trade deficits with countries around the world by renegotiating trade arrangement. With Trump having imposed 10 and 25
per cent duty on aluminium and steel respectively coming from all countries except Canada and Mexico, businesses worth $100 billion out of the total business of $635 billion faced difficulties. Although this was not regarded as a trade war, the big threat came later with the announcement of the $200 billion tariff imposition on China’s export in June 2018. This price escalation makes industry experts feel that that the world is now on the brink of a major trade war, which will affect India too in many ways. The trade war is altering business equations amongst nations. According to the IMF, in 2017, EU exports to Asia were bigger than those to the US. While Asia’s exports to the EU are growing fast, making the Union increasingly more important to Asia. China is now the largest market for an expanding list of countries, including Australia, Brazil, Russia, South Africa, South Korea and Indonesia, among others.
Impact on India yet to show up Most economists had earlier felt that with China being forced to back off, India’s export penetration in the US and elsewhere will increase substantially. However, an analysis of
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AppArel / COVER STORY
trade data shows while China’s export basket is more advanced and consists of more finished manufacturing goods, India’s consists more of raw materials and semi-finished goods. As the tariff war continues, it is unlikely that India will gain significantly in the international market at the expense of China. A trade war will hurt China mostly and in anticipation of that, the Central Bank of China has eased monetary policy. A significant trade war will have an effect on many countries that are integrated into China’s supply chain such as Japan, Korea, Taiwan and some South East Asian countries. It will have less direct impact on India due to the small share of trade in economic activity. Since India is highly integrated into global services supply chains, it is expected that the trade wars will not directly affect services. However, there will be some changing dynamics in our country’s economy. The basic principles of economics -demand and supply -- will once again come into play. The shortage of supply of a good, either finished material or raw material, will increase the final consumption price for the consumer. Moreover, the burden of increased tax from the duties will also be borne by the final user. The US-China war is affecting India already in many ways. Recently, the value of the rupee has dropped to an all-time low, when in some occasions it was hovering around the mid Rs 68’s against the US dollar. This coincided with Donald Trump’s threat of imposing a fresh round of tariffs on exports worth $200 billion. This trend can be linked to the weakening of the US dollar, which automatically creates a negative impact on the trade deficit of India. The Indian stock markets have also reflected changes with key indices in the Indian share market dropping due to hesitant investors. In the last few months, the BSE Sensex saw regular
plunges. NSE Nifty’s performance too was along the same lines as it saw significant drops. IndiaUS duty tariff rates have also changed, since after the US has imposed duties on steel and aluminium, India now has to pay approximately $241 million worth of tax to the US. So India, as a counter-measure has proposed imposing duties on 30 different types of goods. This will ensure that the US has to pay about $238 million as duties to India. However, this affect the end consumers negatively as everything that falls under the tariff scanner is expected to become more expensive.
Apparel industry optimistic despite odds Some interesting expectations were arrived at the recent edition of Centrestage, a fashion brand-promotion, launch platform and trade exhibition organised by the Hong Kong Trade
According to the IMF, in 2017, EU exports to Asia were bigger than those to the US. While Asia’s exports to the EU are growing fast, making the Union increasingly more important to Asia. China is now the largest market for an expanding list of countries, including Australia, Brazil, Russia, South Africa, South Korea and Indonesia, among others
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AppArel / COVER STORY Development Council (HKTDC). They conducted one-on-one interviews with 234 buyers and 72 exhibitors and came up with interesting results. The study showed many industry players are optimistic about sales over the next one year. Around, 87 per cent buyers and 91 per cent exhibitors expected sales to either remain steady or increase over the next one year. Around 58 per cent buyers expected retail price of their apparels to remain stable in 2019 while 31 per cent expected them to increase and 11 per cent foresaw a decrease. Some of the other projections were that around 38 per cent exhibitors expected retail price of their FOB products to increase as compared to only 17 per cent last year. On the other hand, only 8 per cent of them expected them to decrease versus 13 per cent last year. The casual wear segment got the maximum support from both buyers and exhibitors followed by fashion accessories, at this event. The US-China trade war is not expected to affect Indian exports as apparel and madeup textiles are not included in the currently effective US 301 tariff lists. However, sourcing and production costs are set to increase with over 45 per cent buyers and 75 per cent exhibiters expecting an increase. Around 60 per cent exhibitors, among the traditional markets, Japan and Taiwan have the greatest potential for growth in 2019, followed by Hong Kong, South Korea, Australia and Pacific Islands. Chinese Mainland continued to receive the biggest endorsement as the emerging market from exhibitors followed by ASEAN countries and the Middle East. The Centrestage conference indicated crossover/joint promotions was expected to be the most effective product development strategy in2019, This was expected to be followed by celebrity endorsed fashion collections as well as limited edition collections. E-tailing was also expected to add 40 per cent sales revenues and is an effective product development strategy. On an average, e-tailing
accounts for 40 per cent of the total sales revenue of fashion companies with an e-commerce presence. If current growth rates of imports in the US and China hold in the next few years, by 2021 China will surpass the US to become the largest market for imports in the world, says the IMF. Against this backdrop, Trump’s trade war is creating new impetus for the EU and Asia to speed up opening their markets to forge closer economic ties.
US consumers most affected When the General Agreement on Tariffs and Trade (GATT) was refurbished as the WTO around 23 years ago, almost every country in the world joined the organization. As per agreed norms, trade tariffs amongst member countries are reduced through negotiations and the agreed rates applied uniformly to all trade partners. However, China which joined the organization in 2001 does not adhere to these rules and does many things such as shaking down foreign investors for chosen technologies besides giving subsidy to its own industries. While there are enough reasons for punishing China for flouting multilateral trade rules, through overproduction, dumping overseas and unnecessary restrictions on market access, the primary loser from this trade war is likely to be the US, as the so-called benefits of more manufacturing jobs will negated by the higher prices that the consumer has to pay. Tariffs on Chinese-made goods are increasing prices on apparel and footwear imports in the US, and the impact will be even more damaging when tariff rates jump from 10 to 25 per cent in 2019. The National Retail Federation (NRF) and other industry groups have stated that the tariffs harm both US consumers and workers, but it seems retailers and manufacturers will need to adjust to these additional costs. A
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prolonged trade war between the world’s two largest economies represents a major challenge for retailers, manufacturers and consumers. In the short term, increased sourcing and supply chain costs will lead to lower margins, higher prices or both. In the longer term, US companies will need to ramp up with suppliers in countries that are not subject to tariffs. But it’s not so easy to shift supply chains that have been built up over many years. Additionally, apparel and related products make up a significant portion of US imports, and China represents the world’s largest manufacturing base for these items. While experts suggest alternatives to China such as nearshoring — sourcing products from NAFTA countries or other non-Asia regions — and onshoring, i.e. using US manufacturers, is an option but questions remain as to whether they will be enough to offset the costs that will hit US consumers.
Need to accelerate India-EU FTA India’s exports and imports of goods and services is around 42 per cent of its GDP. Any trade war is thus likely to have implications for the country. Turkey recently imposed a 21 per cent customs duty on Indian products. Additionally, local value addition of 51 per cent in case Indian companies wish to sell their products in Turkey, forces them to create capacity in a suboptimal manner by investing significantly in the local country. The trade barriers that Indian textile companies face pose obstacles in their access to some of the most important markets. For over four decades, Indian manufacturers designed their production, investment and sourcing strategies around the assumption that the movement of goods across the world’s borders would continue to grow ever freer. In the process, many of them built complex, intricately linked and cost-efficient supply chains that span the globe. The US and EU markets absorb about 60 per cent of the Indian output in apparel. The country, therefore, needs to expedite an FTA with the EU.
Conclusion The trade war between the United States and China has emerged as a blessing for the Bangladesh garment industry, which is reportedly witnessing increased work orders from both the countries, underlined a recent study. Analysts say, many buyers are returning to Bangladesh and the country’s share in the American garment market has increased 6.46 per cent in the first nine months of the year. It is an opportune moment for Bangladesh as China also announced tariff cuts on imports from the country. Moreover other than inflow of work orders for apparel items for competitive
Many countries will capitalize off the trade war as various businesses shift some or all of their manufacturing operations out of China due to concerns over steep tariffs in the US. Indeed many businesses began moving some or all of their manufacturing operations out of China over the last several years because of soaring costs but the trade war is fast forwarding the exodus. Various companies have begun moving their manufacturing operations out of China to other countries across Asia, and Mexico, while others are considering countries they should set their sights on. Vietnam is high on this list. pricing, Bangladesh will also reportedly benefit when it comes to sourcing cotton as China has reportedly stopped buying cotton from US already. After China stopped buying cotton from USA (which was worth a little more than $1 billion), Bangladesh has now reportedly emerged as the largest cotton importer. Many apparel and electronics manufacturers have started diversifying production to rivals such as Vietnam and India. Vietnam specially has been enjoying an export boom in clothes and cell phones, which was earlier dominated by China. As Vietnam has become a more important player in supply chains, the US trade deficit with the country has swelled to $38 billion last year, three times larger than in 2011. India is also expected to slowly catch up in some specific market segments. The US is now banking on its offshore apparel and electronics production factories set up close home, rather than sourcing from low cost but far-away countries. The world is waiting with baited breath to see how Chinese exports will get hit by the new tariff laws and how it will also affect trade relations with other countries. n
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Despite tariff wars, global outlook for clothing, fashion market positive in 2019
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ong Kong Trade Development Council (HKTDC), during the course of Centerstage, a fashion brand-promotion, launch platform and trade exhibition conducted face-to-face interviews with 234 buyers and 72 exhibitors to gain an overview of the current market prospects, new product trends and latest e-tailing developments.
Optimistic about sales The results reflected optimistic views on sales prospects over the next 12 months with exhibitors being more upbeat than buyers. Around 87 per cent of buyers and 91 per cent
exhibitors expected sales to remain steady or increase over the next 12 months. Around 58 per cent of buyers expected the retail price of their products to remain unchanged in 2019, while 31 per cent expected an increase in the retail price and 11 per cent foresaw a decrease. Around 38 per cent of all exhibitors expected the FOB selling price of their products to increase compared to 17 per cent in the 2017 survey, while a comparatively small number of exhibitors expected it to decrease to 8 per cent as against 13 per cent last year. Around 45 per cent buyers expected sourcing prices and production costs to increase, while 51 per cent anticipated it to remain unchanged. Only 4 per cent, however, predicted a decrease in costs.
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Japan, Taiwan show highest growth potential In terms of market potential, Japan and Taiwan led with nearly 60 per cent of exhibitors opting for these countries as having the highest growth potential among their traditional markets, followed by Hong Kong, South Korea, Australia & Pacific Islands. Chinese Mainland continued to receive the biggest endorsement from the exhibitors as the major emerging market, followed by ASEAN countries and the Middle East. Around 68 per cent buyers and 71 per cent exhibitors did not expect any positive impact of the China-US trade spat on the export performance of their products. While around 30 per cent of buyers and exhibitors expected the war to affect them negatively. The relatively high neutrality perhaps reflects the fact that apparel and made-up textiles (of HS chapters 61 through 63) are not included in any of the currently effective US 301 tariff lists. Around 47 per cent of respondents backed ‘crossover/ joint promotions’ as the most prevalent product development strategy in the coming year. This was followed by ‘celebrity or key opinion leader-endorsed fashion collections’ and ‘limited edition collections’. Among buyers, brand-licensing products’ and ‘collections made from new materials’ emerged as next most important strategies. Exhibitors, however, considered collections made from new materials and sustainable fashion
as their most favored product development strategies for 2019.
Rising e-com trend across the globe On an average, e-tailing accounted for 40 per cent of the total sales revenue of fashion companies with an e-commerce presence. Around 29 per cent of the companies not engaged in e-tailing, or are planning to start selling online within the next two years. While 71 per cent companies currently engaged in e-tailing or are planning to, perceived the channel to be suitable for selling women’s wear, followed by fashion jewellery (27 per cent), bags (24 per cent) and menswear (18 per cent). Of those companies currently engaged in e-tailing, 61 per cent sourced from Mainland China, followed by Hong Kong (32 per cent), Japan (19 per cent), South Korea (14 per cent) and the ASEAN countries (14 per cent). n
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FDI in Malaysian clothing sector reaches MYR112 million
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s per Malaysian Investment Development Authority (MIDA), FDI in Malaysia’s clothing and textile sector is increasing more this year on the back of a robust performance in 2017. From January to June 2018, the total investments in the sector reached MYR244.8 million ($58.73 million) of which FDI accounted for MYR112 million ($26.87million). This compares with MYR428.8 million ($102 milliion) of investments approved across 12 projects for the garment and textile sector last year where MYR322.3 million ($77.35 million) – 75.2 per cent – came from foreign investors.. All these projects put together generated 1,850 jobs comprising skilled positions for engineers, quality controllers, and highly skilled technicians. MIDA expects investments to
EU apparel imports rise by over 10 per cent
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he apparel imports of the European Union’s apparel imports increased by 10.70 per cent in July this year. Its apparel imports from January to July 2018 increased marginally by 0.06 per cent. During the period the value of China’s apparel exports to the EU
declined by 6.78 per cent. Unit prices this year too plunged by 1.60 per cent. Bangladesh’s apparel exports to the EU grew by 3.92 per cent year on year. The exports of Turkey however remained stable despite the worst ever economic crisis it is facing and managed to tap a 2.90 per cent growth in its apparel shipments to the EU. India’s value of apparel exports to the EU decline by 3.02 per cent, while those of Vietnam increased by 24.4 per cent till July 2018. n
continue to rise in 2018 based on the performance in the first half of the year. The Asian Development Bank (ADB) has also sounded positive about a rise in FDI in general during 2018. n
Bangladesh earns $1.13 billion from trousers
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atest Otexa figures reveal, export of Bangladeshi-made cotton trousers fetched $1.13 billion in revenue during January-September 2018, a 9.31 per cent gain compared to the same period last year. Cotton trousers made up for 27 per cent of Bangladesh’s total apparel exports to the US in 2018.
Bangladesh’s apparel exports to the US, during the period, amounted to $4.16 billion, up 5.84 per cent from last year. The major garments exported were cotton trousers, cotton dress, knit blouse, slacks, cotton underwear and sweater. Export of slacks marked a significant rise, fetching over $59 million. This was an impressive 9.32 per cent gain from the $54 million during the period in 2017. On the other hand, export of woven shirts declined. It fetched $41 million during this time, down 1.14 per cent from previous year. n
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Higher growth expected for US apparel and footwear brands
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he sales of apparel and footwear companies are expected to increase between 6 per cent and 7 per cent this year and between 4 per cent and 5 per cent in 2019. Their operating profit growth is expected to be in the range of 8 to 9 per cent. The positive outlook for the US apparel and footwear industry reflects faster-than-anticipated revenue and profit growth.
Nearly all rated companies are expected to show some form of profit growth next year as they realize benefits from cost-saving initiatives, acquisition synergies, new product introductions and targeted marketing as well as improved macroeconomic conditions. Many brands are focusing on direct-to-consumer sales channels as a driver of growth. This allows companies to more closely control brand messaging and the overall shopping experience. n
World manmade yarn exports down 36 per cent in Q2
Germany emerges as the top destination for Bangladesh’s apparel exports
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orld manmade yarn exports dropped 36.28 per cent in the second quarter. Manmade filament yarn exports fell 32.25 per cent over the previous quarter and 24.50 per cent over the corresponding period of last year. Manmade staple fiber yarn exports witnessed a drop of 47.41 per cent over the previous quarter and a 45.75 per cent drop over the corresponding period of the last year. India’s manmade yarn exports grew 3.02 per cent in the second quarter. Under total manmade fiber exports, India’s synthetic filament yarn exports accounted for a share of 95 per cent. Synthetic filament yarn exports from China grew 12.43 per cent over the previous quarter and 33.09 per cent over the corresponding period last year. Turkey’s manmade yarn exports grew 3.91 per cent over the same period last year but from the previous quarter there was a fall of 7.67 per cent. Mexico is the top export market for USA’s synthetic filament yarn. n
ccording to the latest data released by Bangladesh Export Promotion Bureau shows, Germany has emerged the top destination of Bangladesh’s apparel exports to the world in October 2018, followed closely by the United States. Bangladesh earned $2.06 billion from exports to Germany during July-October 2018. This was a 19 per cent gain over the $1.73 billion from the same period last year. Knitwear fetched $ 1.23 billion during this period, a gain of 13 per cent gain. Woven items surged over 29 per cent, fetching over $834 million during this first fiscal quarter. The US market, which once was top apparel export destination for Bangladesh, saw an impressive gain during the first quarter. The total apparel exports during this period fetched $2 billion, marking a 31 per cent gain over last year’s $1.56 billion. n
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British fashion industry braces up for Brexit and beyond
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nly seven months remain for the UK to formally exit the European Union, and the £28 billion fashion sector has to get three different looks ready for future-proof business. As Richard Lim, Chief Executive of Retail Economics points out, the potential scenarios would include ‘Hard Brexit’, where designers, retailers and manufacturers have to pay to trade with the EU. This would mean clothing and footwear tariffs of about 11 per cent or just over £1 billion more each year. A second option includes free trade agreement and a third option believes the UK
would remain a part of the customs union. Lim believes, whatever happens, the price of a pair of jeans will, in all likeliness, go up post Brexit. Tariffs, and an exodus of (European) shop staff, designers, warehouse staff, delivery drivers would all add up to push up clothes prices in the UK.
Focus on easing Brexit transition Annually, the UK imports around £10 billion worth of clothes and shoes from Europe and more than 10,000 European staff work in the British fashion industry. It has become a microcosm of UK’s struggle to deal with the referendum result. Katharine Hamnett sold thousands of ‘Cancel Brexit’ T-shirts and then went on to offer a new version: ‘Fashion
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Hates Brexit’ tees. While campaigning for a second referendum Hamnett also has a Plan B. She has set up her own Italian company, near Venice, ‘to handle production and logistics, so it doesn’t get snarled up in complicated Brexit red tape and import and export problems for its manufacturing and shipments’. Francis Card, Fashion Consultant and former Matchesfashion. com COO laments the fact that the industry knows little about the Brexit deal. Her sentiments are echoed by Clare Hornby of ME+EM, whose Breton T-shirts are loved by the Duchess of Cambridge. Photographer Nick Knight believes Britain and its communities will be considerably worse off both economically and culturally if they leave the EU. The devaluation of the Brexit-fuelled pound is surging the number of Chinese, Arab and American fashion tourists chucking cash at the West End’s fanciest tills. But to offset rising foreign manufacturing costs, an influx of shoppers needs to be balanced by an outflux of international talent from the industry. José Neves, Founder of luxury online platform Farfetch, believes if Brexit jeopardises the presence of 25 different nationalities in its London office, it’ll be a major loss.’ Many great British designers are European and proud of it’: Mary Katrantzou is Greek, Simone Rocha is Irish, Peter Pilotto is Austrian-Italian.
Losing skilled workforce a matter of concern Another concern post Brexit is the talent drain. As Stephanie Phair, Chair British Fashion Council, points out ‘making sure young people from all around the world have access to creative education and skills to protect our home-grown talent pipeline’ is a post-Brexit priority. The BFC helps run the fashion arm of the Home Office’s Tier 1 visa scheme, giving 2,000 top designers from outside the EU fast-tracked visas. ‘In light of Brexit, this is something that is incredibly important.’ However,
universities claim talent drain isn’t happening yet. The London College of Fashion says its proportion of EU applicants hasn’t dropped over the past year. On the other hand there are people like Liam Fox, International Trade Secretary, who feel Brexit is ‘an unprecedented opportunity to create a trading environment that delivers for our country, our businesses and our citizens’. Brexit isn’t a wardrobe disaster for every London company in the fashion industry. The vote could help in the return of ‘Made in Britain’. At the same time there is concern as a large number of designers, stitchers etc, are from mainland Europe. Also, UK apparel makers need something to make their clothes from — as three quarters of materials used in the UK are imported. If there is no deal, UK manufacturers will be subject to a bewildering array of tariffs. In short, experts worry London may lose its reputation as a global fashion capital. Last month, Superdry founder Julian Dunkerton, gave £1 million to the People’s Vote campaign for a second referendum. And as Card points out UK has come back from a major exodus of designers and top models at London Fashion Week around a decade ago — it was hard to do. Brexit’s potential loss cuts through all aspects of the industry: it’s a disaster for stores, businesses and carefully nurtured brands, and the freedom to move everything and everyone easily across borders. n
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US accuses India of flouting WTO norms for cotton subsidies
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he United States, in a recent filing to the WTO, has accused India of paying out far more in cotton subsidies than the World Trade Organization allowed, with payments vastly in excess of what it had officially declared. The filing is the latest in a series of analyses of publicly available data that Washington has submitted to the WTO, each one setting out apparent breaches of WTO rules that are hiding in plain sight. Previous submissions have targeted China and Vietnam as well as India. According to the U.S. assessment of India’s market price support (MPS) for cotton, New Delhi was allowed to pay out up to 10 per cent of the value of production, but the actual figure had ranged from 53 percent to 81 per cent since 2010. For the 2015/16 marketing year, India had notified market price
USTR revokes duty-free concessions on 50 Indian imports
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he office of the United States Trade Representative (USTR) has revoked dutyfree concessions on import of at least 50 Indian products, mostly from the handloom and agriculture sectors. The federal register notification mentioned 90 products that were so far subject to duty-free provisions under the Generalised System of Preferences (GSP). These products may continue to be imported subject to regular most favored nation dutyrates, a news agency reported. In 2017, the duty-free export to the United States by India, the largest beneficiary of the GSP, under the scheme was to the tune of more than $5.6 billion.The list conveys that a large number of small and medium businesses could be impacted, in particular handloom and agricultural sector, the report said. Products from Pakistan, Ecuador, Brazil, Thailand, Suriname, Turkey, the Philippines, Argentina and Indonesia have also been removed from the GSP list. n
support of $18 million, which was about Rs 1.2 billion, but the United States estimated that the correct figure to be around Rs 504 billion. In 2016/17, India had not notified any MPS, but the United States calculated the correct value to be around Rs 557 billion. n
India asks China to reduce tariffs
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ndia has sought tariff concessions for its exports to China as the country has granted deep duty cuts to India’s competitors including Peru, Pakistan, Australia, South Korea and Asean countries in free trade agreements with them, which has displaced some of India’s exports. The products for which concessions have been sought include naphtha, bovine leather, shrimps, cotton yarn, frozen, shelled shrimps, broken rice, fresh grapes, zinc, aluminium oxide and hydrocarbons like paraxylene, polyethylene, polypropylene and benzene. The Asia Pacific Trade Agreement is the only operational trade pact linking India and China. South Korea, Bangladesh, Lao PDR and Sri Lanka are also APTA members. For instance, India’s exports of naphtha, a major industrial fuel, to China are subject to a 6 per cent duty with a 10 per cent margin of preference under APTA. This is the highest duty for any of China’s FTA partners as Asean countries pay zero, Australia 2.4 per cent and South Korea 4.8 per cent. India’s exports of frozen shrimp and prawns form a small share in the Chinese market due to the absence of tariff concessions. Asean members face zero per cent tariff in the Chinese market and thereby account for a six per cent share in that country’s imports of these products. n
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TPP-11 to lower tariffs on agricultural and industrial goods
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he 11-nation TransPacific Partnership (TPP-11) free trade agreement will lower tariffs on agricultural and industrial goods, as well as unify rules for business. Tariffs on 99.9 per cent of Japan’s industrial products and 98.5 per cent of its farm, forestry and seafood products will eventually be abolished. Tariffs on agricultural products exported from Australia and New Zealand to Japan will also go down. TPP-11 will be implemented on December 30, 2018. Six legislatures of member states have ratified the pact. The trade
RCEP to not be implemented by year end
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he Regional Comprehensive Economic Partnership, being negotiated by 16 mostly Asian countries, is unlikely to be signed by year end. The RCEP negotiating countries include the ten ASEAN countries — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — plus Australia, China, India, Japan, South Korea and New Zealand. After OVER five years and 24 rounds of negotiations since May 2013, RCEP countries are still struggling to try and forge an agreement. Concluding the pact by year-end looks unlikely due to differing levels of development among the countries involved, as well as political factors including general elections next year in India and Australia. India has issues in goods and services. It is of the view that there are many issues that are yet to be resolved, including the extent of commitments India would take in opening up its goods market and what it would get from other members in terms of increase in mobility of professionals. Giving substantial concessions to members, especially China, could lead to protests from a large section of the Indian industry. Once concluded, the RCEP is likely to result in the largest free trade bloc in the world covering about 3.5 billion people and 30 per cent of the world’s GDP. n
deal takes effect 60 days after at least six countries complete the ratification process. Nicknamed the TPP-11, the agreement was earlier known as the Trans-Pacific Partnership but was formally renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership last year. Australia recently notified New Zealand that it has ratified the agreement. Mexico, Japan, Singapore, New Zealand and Canada had already completed the procedures. Vietnam’s parliament is expected to approve the deal by mid-November.Once the trade pact comes into force, a TPP committee of ministerial-level officials from member states will meet and decide on needed steps for countries hoping to join, such as Thailand and the U.K. n
Sri Lanka to lose GSP access with regime change
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ri Lanka might lose its duty-free access to the EU as the return of Mahinda Rajapaksa as Prime Minister could derail the progress made toward national reconciliation. Under Generalised System of Preferences Plus status, Sri Lanka’s top exports of garments and fish get lucrative concessions in the world’s largest single market. Trade is the key to Sri Lanka’s economy and the EU is its biggest export market, accounting for nearly a third of exports in 2017. Sri Lanka regained the GSP plus preferential treatment in 2017. Its exports to the EU have since jumped by 18 per cent. Sri Lanka had promised the EU in 2016 that it would work toward reconciliation with Tamils, who mostly live in the north and east of the predominantly Buddhist nation. The country also pledged justice and reparations to victims of human rights violations committed during the 26-year civil war. The EU warning on trade is the strongest yet from western powers. On the other hand, China, which has invested billions of dollars during Rajapaksa’s presidency, has called for noninterference and said Sri Lanka could tackle its own problems. Sri Lanka’s garment industry is its second biggest hard currency earner. n
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Asia Pacific to be frontrunners in global knitwear market by 2026: Study
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s per a new study by Transparency Market Research titled ‘Knitwear Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018-26’ the global knitwear market is expected to expand at a CAGR of 5.3 per cent from 2018 to 2026 to be worth $817,402.7 million by 2026. Volume wise, the market is expected to expand at a CAGR of 5.0 per cent from 2018 to 2026 reach 26,208 million units in 2026. The market share of Asia Pacific in the global knitwear market is expected to increase during the forecast period.
Low-cost Asia Pacific markets to lead Global knitwear brands such as Gap and Abercrombie & Fitch and major activewear brands such as Adidas AG and Nike continue to focus on research and development, design, logistics marketing and branding, and service to improve their position in the market. These brands outsource their manufacturing to low-cost Asia Pacific countries such as China, Bangladesh, and India. Adidas AG manufactured only 2 per cent of its apparels in US and only 1 per cent in Europe in 2017; outsourcing almost 97.0 per cent production to Asia Pacific. Similarly, Nike manufactures all its apparels through independent contract vendors. The apparel contract factories in China, Vietnam, and Thailand manufactured 26.0 per cent, 18.0 per cent, and 10 per cent, respectively of the company’s total apparel production.
China, Bangladesh, India, Pakistan, and other South Asian and East Asian countries are major exporters of knitwear products across the globe. Although, knitwear is still manufactured in Europe, its quantity has declined. The unit cost to manufacture knitwear is high in the UK due to high wages, yet British designers prefer to manufacture locally due to short lead time and flexibility in minimum order quantity.
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Branded knitwear to see higher growth North America on the other hand, imports almost all of its knitwear products from Asia Pacific. Although R&D and designing of these is majorly done outside Asia Pacific, manufacturing is mostly done in China, India, Bangladesh, and Vietnam. The knitwear market in India is also rising due to a growth in the number of organised knitwear retailers selling branded knitwear products. Demand for branded knitwear is also rising in the Middle East. With approximately 62.0 per cent of its population being young and middle-aged, the region imports knitwear products worth US$ 3.5 billion annually. Knitwear exporters such as Bangladesh export knitwear to the UAE to increase its knitwear revenue. Cotton knitwear products are in demand in South American countries. There is a growing demand for cotton knitwear products in Brazil and other South American countries. In 2016-17, Brazil imported approximately $11.47 million of T-shirts, singlets and other vests made of cotton. Almost half of the knitwear imports in Brazil are from China. n
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AppArel / CONCERN
Volatile prices, fabric-sourcing challenges big concern for India’s apparel sector
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abric sourcing, till a few years ago, was one of the most challenging tasks. But increasing options of fabric sourcing, advanced technologies and awareness about quality have improved the conditions for fabric sourcing; though some challenges still prevail and industry continues to struggle with those issues.
Procurement of synthetic fabrics or yarns is more of a concern than cotton yarn or fabric. There are some yarns or blends that are not available in India, like Cashmere. Additionally the man-made fiber sector attracts numerous duties which increases the cost of these fiber manufacturers. Local Indian producers then quote high and unexplained prices. Import duties on fabrics, is another cause of concern as it increases the price of fabrics, especially linen and imported silk.
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Price volatility needs to be roped in Garment manufacturers using cotton fabric are almost helpless when it comes to price volatility as prices increase anytime without any strong and valid reason. Though in past 10 years, situation in sourcing of Indian fabric has improved, the main challenge of sourcing cotton and cotton blends yarn still exists like before. When prices of yarn increase, suppliers prefer to deliver it at current rate to gain extra profits though they are supposed to deliver it first to the buyer to whom he has already agreed upon earlier at lower prices. Such issues need to be addressed as they not only delay fabric development but also the overall efficiency of the business.
Fabric quality a bug bear As for quality, apart from good vendors, fair price, strong check, trial runs are being adopted by many apparel manufacturers. However, whenever there is a tilt towards cotton export, yarn manufacturers or suppliers increase prices without any reason. There is no way to control illogical price hiking. Some exporters see it as market dynamics and manage accordingly. Chinese or imported fabric quality is better. Most buyers approve Indian fabric as there is no other viable option and prices of Indian fabrics are a little lower. Therefore, Indian companies need to adopt similar advanced infrastructure like China. n
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AppArel / Cotton
World cotton production to decline this year
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lobal production of cotton is expected to decrease in 2018-19. Although Brazil and West Africa are expected to see an uptick in planted area, these are unlikely to be significant enough to offset losses in Australia, China, India and the United States. The global stocks declined by 22 per cent from 2014-15. The trend is expected to continue next year, with the projected 6 per cent decrease further eroding stocks. Total ending stocks in China are expected to drop to 8.2 million tonne, representing the lowest levels since 2011-12. China’s stocks-to-use ratio also continues its decline, falling to 93 per cent for the first time since 2011-12. Outside of China, cotton stocks increased for the third season in a row, surpassing 10 million tonne. Due to uncertainties in the world economy and trading market, the global consumption forecast for 2018-19 has been revised
Global organic cotton increases by 10%
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lobal organic cotton output rose by 10 per cent in FY 2016-17. The largest volumes came from India, China, Turkey and Kyrgyzstan. While organic still occupies less than 1 per cent of global cotton production, many countries have growth in the double-digits. A huge area of cotton-growing land is in transition to organic. About 80 per cent of this transition is taking place in India, with the remainder stemming primarily from Pakistan, China, Tanzania, and Turkey. However, after hitting a production peak in the 2009-10 season, the sector failed to kick in, and it has been pretty much downhill all the way since then, while other certification schemes such as BCI cotton have flourished. While organic cotton undoubtedly has positive connotations with consumers, it is more expensive to grow with more variable yields, making it much more difficult to get to market at a profitable price point. Organic cotton is not necessarily economically viable. There is no disputing the fact that the organic cotton market has struggled to maintain any significant momentum in recent years. Indeed, it often feels like a case of two steps forward, three steps back. Cotton’s share in fiber use has dropped from 50 per cent to just over 30 per cent. n
downward to 27.5 million tonne. Demand for Indian cotton is robust from China as a trade war is prompting the world’s top consumer to avoid imports from the United States. Indian cotton prices are ruling 10 per cent lower than international prices. The minimum support price is up 26 to 28 per cent, notwithstanding favorable monsoon conditions. n
ICF estimates cotton production to be over 370 lakh bales in 2018-19
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he Indian Cotton Federation (ICF) has estimated cotton crop for 201819 in the country to be 373 lakh bales of 170 kg a bale. Production in the north zone including Punjab, Haryana and Rajasthan is expected to be 61 lakh, the central zone, 200 lakh bales (Gujarat, Maharasthra, and Madhya Pradesh), and the south zone 107 lakh bales. Production from the entire country is expected to be 373 lakh bales and imports might be 18 lakh bales. The provisional estimate for consumption is 320 lakh bales. Without an official crop estimate, there were uncertainties about the cotton crop situation. There were also reports of a lower crop. The uncertainties were leading to hardships for cotton trade and the textile mills. According to a study by the Federation, the average crop size in the last 12 years in the country is 377 lakh bales. The average of the worst year is 348 lakh bales. For the cotton year 2018-19, around five lakh packets of cotton seeds are sold. Except for a few pockets in Karnataka, Maharashtra, and Gujarat, all the cotton growing areas have received sufficient rain. So, the cotton production this year should be higher. n
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AppArel / Import
Bangladesh apparel exports to India increase
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angladesh’s apparel exports to India increased by 167 per cent in October 2018. For Q1 the country’s apparel exports to India were $187 million. During this period woven garment exports to India increased by 300 per cent from the same period last year. This remarkable surge in exports to India can be attributed to foreign brands’ and retailers’ opening up a number of outlets and stores in India – which, in turn, have been sourcing heavily from Bangladesh. Foreign retailers buy a lot of garment items from Bangladesh for Indian customers, especially for the rising middle class. Last fiscal, apparel exports to the country from Bangladesh witnessed a 100 per cent gain – a trend which is still continuing. India’s imports of readymade garments from Bangladesh during July-November 2017 increased by 56 per cent compared to the same period last year. Knitted apparel imports
grew by 69 per cent compared to the corresponding period of the previous year. Woven apparel imports grew by 51 per cent compared to the same period of 2016. GST has led to a flood of textile imports from Bangladesh to India. The main reason is the exemption of basic customs duty on imports of garments from Bangladesh. n
German raw material imports decline by 9%
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he import of raw materials by Germany declined by 9.4 per cent in August as its textile production sank by 3.3 per cent. Clothing production in the country fell by 3 per cent. While textile production price increased by 0.9 per cent, clothing production price increased by 0.7 per cent. Order intake in the country increased steadily in August by 0.1 per cent above July. Clothing had a 13.1 per cent lower order intake. German retail has
increased proceeds by 3.1 per cent above 2017. Germany has overtaken the United States and become the largest export market for Bangladesh’s readymade garments. Due to strong economic activities in Europe, especially in Germany, and preferential treatment received by Bangladeshi exporters, Europe’s largest economy has become the largest market for Bangladeshi garment products. Bangladesh’s readymade garment exports to Germany grew by 8.65 per cent in fiscal 2018 against a growth of 2.84 per cent in the US market. n
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AppArel / TIRUPUR
Eyeing US, EU markets, Tirupur knitwear makers set up units abroad
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ndia’s largest knitwear manufacturing hub, which faced the brunt of demonetisation and GST, is in doldrums as many manufacturers are shifting their units from Tirupur to countries like Ethiopia and Sri Lanka that provide free access to markets like the US and EU. These countries offer excellent infrastructure to young entrepreneurs. They also offer a geographical advantage over others as the flying time from Coimbatore to Colombo is just 70 minutes. In the past six months, four wellknown garment manufacturers, who excelled in
the sector for decades, opened factories in Ethiopia.
Easy market access, cheap labour lure Tirupur makers There are many reasons why so many Tirupur manufacturers are opening units abroad. Cheap labor, free market access to the EU and US, readily available infrastructure and absence of redtape. The Indian industry, which was growing at over 10 per cent every year, has been reporting a 7 per cent dip since 2011, resulting in loss of a whopping Rs 2,000 crore ($0.27billion). Exports, valued at Rs 26,000 crore ($3.54 billion) in 2016-17, declined to Rs 24,000 crore ($3.27 billion) in 2017-18 and domestic sales stood at
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around Rs 18,000 crore($2.45 billion). India does not offer a free market access to EU and the US, which puts manufacturers in Tirupur at a disadvantageous position since entry tax is levied once goods reach the destination countries. Bangladesh and Sri Lanka, on the other hand, offer free access to the EU; Ethiopia also offers free access to both the EU and the
US – thus attracting most of the buyers. The labor cost in Tirupur is $150 to $200 (between Rs 11,000 to Rs 15,000) a week, while it is just $75 (Rs 6,000) in Ethiopia. Secondly, in India, separate labor is hired for stitching, packing, etc. Foreign countries, however, train their labor to multi-task, saving much more on the cost involved.
Ready infrastructure makes it easy to move The Ethiopian government keeps its infrastructure ready for garment manufacturers – all they have to do is to go with their machines, hire employees, train them and their factory is up and running. This plug and play model attracts manufacturers as they don’t have to go through the hassle of looking for land, constructing a building and get permissions. Everything is done by the government; all they have to do is to start our operations For example, R Rajkumar, Managing Director, Best Corporation, which launched operations in Hawassa, Ethiopia a couple of months ago, operates 500 machines in the country in two shifts. The company plans to increase capacity to 2,000 machines gradually. Similarly, Santex Inc, which was also lured by the free market access that Sri Lanka offers to the EU, has opened a factory near Kandy in the country. n
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AppArel / SOURCING
With rising costs in China, Mexico, Turkey emerge strong sourcing destinations
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McKinsey study reveals, western brands are finding it easier to produce in low-cost countries due to rising costs in China. US-based brands find it easy to source from Mexico and for brands selling in Europe, Turkey is a prime manufacturing destination.
Nearshoring the new trend The McKinsey study suggests, labor costs in China in 2005, were about one-tenth of the US, but now it’s about one-third. This sharp
rise has resulted in some nearshore countries becoming cheaper than China. For instance, making a pair of jeans in Mexico and importing it into the US costs about 12 per cent lesser. And for a company looking to import its jeans into Germany, Turkey is 3 per cent cheaper than China. Although producing the same pair of jeans cost and around 20 per cent less in Bangladesh; Turkey and Mexico are preferred due to their shorter delivery times from those countries. The shorter lead times yield a number of benefits, creating an added economic bonus.
Innovations speed up deliveries Fashion companies are embracing new technologies
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to speed up deliveries. McKinsey assumed a hypothetical scenario where all major technologies currently in development were implemented, and worked with a university in Aachen, Germany, and the Digital Capability Center Aachen to calculate the cost savings in time and labor for producing a pair of jeans. Based on their calculations, to produce the jeans in China
with automation and import them into the US, the final cost ends up being around $11.40. But to produce them in Mexico with automation and import them into the US, the cost would be about $10, plus the assorted benefits of the shorter lead time, too. However, experts agree that even though these changes are happening they are likely to take a long time. China has built up a manufacturing infrastructure and capacity that other countries just can’t match. Some brands are already moving a share of production to nearby countries, but a large-scale shift might not be possible until those countries are able to build up factories to handle the workload. The vast majority of this work currently happens in Asia, particularly in China, especially in the case of any specialised fabrics. Companies may assemble finished garments in Mexico or Turkey, but they buy and import all their materials from much further overseas. With shipping costs and duties rising, many Western brands are likely to keep their production in Asia. Clothing and footwear brands are being pushed to look outside China and nearer to home for manufacturing. In a highly competitive market that’s splitting ever more into winners and losers, a fast, flexible supply chain is increasingly an advantage. It allows brands to respond better to the needs and wants of today’s demanding, internet-enabled shoppers, and that’s why brands including Nike, Adidas, Levi’s are changing the way they make their products—and investing in things like automation and moving production nearshore. Ultimately, it’s not so much a question of whether garment production will move away from China and closer to Western markets, rather it will be how much of the supply chain will be rerouted, and when. n
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AppArel / Business
China still remains the global textile leader
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hough the fast-paced recovery of the global economy and increased domestic demand led to a strong growth in Chinese textile industry in the first
half of 2018, the US-China relationship posed great challenges. As latest statistics from General Administration of Customs of China indicate, Chinese textile and apparel exports in the first half of this year amounted to $127.524 billion representing a year-on-year growth of only 3.24 per cent. Exports of textile yarns, fabrics and end products, in particular, amounted to $58.332 billion, a YOY growth of 10.28 per cent, while export of garments and accessories decreased 2.03 per cent YOY.
Domestic market sees good growth China’s domestic textile and apparel market continued to grow at a fast pace with both physical stores and e-commerce channels registering high level of sales. As the country’s National Bureau of Statistics indicate, the sale of clothing, shoes, hats and knitting products from January to May 2018 increased by 9.1 per cent over the same period last year. Meanwhile, e-commerce channels continued to maintain rapid growth. The sales of clothing on these channels from January to May
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increased by 24.9 per cent YOY, representing a higher growth rate when compared with the same period in the previous year. As per latest statistics from the Office of Textiles and Apparel US, China’s textile and apparel exports to the US totaled $38.74 billion in 2017, of which apparel exports was $27.03 billion and textiles and finished product exports was $11.71 billion. From July 2018, the US imposed 25 per cent tariffs on Chinese products worth $36 billion. China took counter measures. Meanwhile, the Office of the United States Trade Representative (USTR) further announced 25 per cent tariffs on another list of Chinese imported products worth $16 billion on August 7. The Customs Tariff Commission of the State Council of China responded by imposing an extra 25 per cent tariff on US imported products also worth $16 billion. An extra 10 per cent tariff on $200 billion worth of Chinese imported products was announced by the USTR recently. This list of over 5,000 products includes textile related products, such as textile raw materials, yarns, fabrics, carpets, technical textiles, leather, etc. As per CNTAC, the value of annual exports to the US amounts to about $4 billion.
Shift in global supply chain A recent survey by the US Fashion Industry Association indicates that nearly 70 per cent of fashion industry executives plan to restructure sourcing from China over the next two
Chinese textile and apparel exports in the first half of this year amounted to $127.524 billion representing a year-on-year growth of only 3.24 per cent. Exports of textile yarns, fabrics and end products, in particular, amounted to $58.332 billion, a YOY growth of 10.28 per cent, while export of garments and accessories decreased 2.03 per cent YOY years. At the same time, China’s latest tariff imposition on US imports led to many Chinese textile enterprises and traders shifting their sourcing to other countries. The foundation for the development of Chinese textile industry in 2018 remains strong. To achieve this growth, the industry needs to upgrade production technologies and product quality, grasp the opportunities of the Belt and Road Initiative and transform into the world’s true textile industry leader. n
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AppArel / PRODUCT FOCUS
Yoga pants attract the attention of biggest athleisure companies; boost innovations
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ntroduced by Lululemon in 1998, yoga pants have conquered the wardrobes of those who, in their entire lifetime, have never been near a yoga studio. These pants today form a part of daily office wear in the US. The first pair of yoga pants was a mix of nylon and Lycra. Made of synthetic elastic fibers, they provided the stretch and softness needed to manage all those sweat-inducing contortions during a lengthy session on the mat.
New fabrics focus on consumer comfort The popularity of yoga pants predictably led to the evolution of new fabrics. Lululemon Athletica , a brand credited with introducing stretchy pants, is developing new fabrics for Yoga Pants. Its original fabric, Luon, with a high proportion of nylon microfibre was trademarked in the US in 2005. Many of its newer fabrics are branded and geared toward specific uses. Luxtreme is a moisture-wicking, four-way stretch fabric that fits like a second skin. Nulux is a compression fabric meant for sweatier workouts. Silverescent is sold as Lululemon’s ‘stink-conquering technology,’ that uses silver bonded to the surface of fibers to stop bacteria from reproducing. A T-shirt made from the material costs $68. Leggings from market competitors promote versatile pants through branded fabric combinations. For Adidas, pants boast fabrics like its sweat-wicking Climalite material or the thermal-regulating Climacool and Climawarm to accommodate training conditions. Likewise, Nike’s Dri-Fit material
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AppArel / PRODUCT FOCUS
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keeps sweat at bay and trainers dry. Even Target’s C9-branded fitness collection flexes high-functioning fabrics: Freedom Fabric is a soft blend of polyester and spandex for lifestyle or fitness, while its Embrace Fabric hugs tight to the body for a cozy feel. Tucked away in the basement of its Vancouver headquarters is a lab called Whitespace, the retailer’s research and development skunkworks. It made yoga pants with repurposed yarn combinations normally used in lingerie.
Brands invest in women’swear lines The biggest businesses now in the athletic wear space have invested heavily in growing their women’swear lines — especially in developing new fabrics and features for the once-simple yoga pant. That same year, Adidas AG began directing its youth brand, Neo, toward younger women. The German sports giant even brought on former Lululemon Chief Executive Officer Christine Day as a strategic adviser. Adidas quickly became a formidable threat to Lululemon’s dominance. Early steps turned into exclusive designs for women through the PureBoost X line, leading to an even larger emphasis on active tops and bottoms, using technology called Climachill and Techfit, both focused on women’s training. Last year, women’s sales for Adidas grew by 28 percent, making it one of the company’s strongest segments. According to Marshal Cohen, NPD Group Analyst, active bottoms and leggings are now a $1 billion industry. Their appeal to consumers has yielded rapid sales growth that shows no sign of going. While Lululemon found success with women consumers by providing a niche product that could satisfy casual and active uses, major brands such as Adidas and Nike completed the picture, confirming just how strong the athleisure trend could be. n
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AppArel / Product
Global denim sales to be driven by sustainability initiatives, new trends
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lobal denim industry is seeing good growth as a recent study by P&S Market Research indicates, global jeans sales reached $40 billion in 2016, and is expected to exceed $87 billion by 2023. Data from Edited suggests retailers have started to refocus on their denim collections with new
launches. They have so far stocked 42 per cent more denim products than last year. As a result, both manufacturers and designers are betting on denim’s revival. Levi Strauss & Co in 2017 posted an 8 per cent growth with a significant revamp of its women’s jeans line. This is the jeans maker’s strongest annual growth since 2011. Similarly, street wear brands Off-White and Vetements garnered a lot
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of attention for the washes on their reworked denim and patchwork styles respectively, while mass-market labels like American Eagle Outfitters set a record for volume last Fall, in an effort to lure teens into stores by providing a range of different silhouettes and washes, from ripped high-waisted ‘jeggings’ to indigo mom jeans.
Asia-Pacific fastest growth market Driven by digitisation within the apparel industry, advancement in new denim knitting technologies, growth in investment in clothing and increasing adoption of luxurious and casual garments by all segments of the society, Asia-Pacific is witnessing the fastest growth in denim sales. Over dominance of comfort clothing over the past decade led to growth stagnancy of classic jeans. The segment did not witness any major innovations during this period. Short-lived trends such as cropped and frayed hemlines, flared bottoms and ’80s throwbacks did uplift the gloom for a brief period but could not bring back the reign enjoyed by the skinny jean style. Meanwhile, for a brief period from 2015 to 2016, athleisure
and comfort stretch street clothing overtook the denim industry but post this luxury and mass markets witnessed a huge upswing. To lower the cost of mass market, various denim manufacturers are experimenting with new materials, replacing cotton with nylon, polyester, aramid, and other spun thermoplastic variations.
New denim styles drive up demand Driven by new trends and eager shoppers, the denim market soared through the early months of 2018. Skinny jeans represented 58 per cent of women’s jeans with other styles such as wide leg and flare bottom, frayed details, silhouettes such as cropped hems, culottes, mom jeans, and wide styles also gaining momentum In addition to this, silhouettes such as cropped hems, culottes, wide leg and flare bottom styles, frayed details and black and white colors are the most in-demand denim styles today with brands like Madewell and Everlane refocusing their attention on them. Madewell, witnessed record sales both in stores and online last quarter, and continues to report double-digit increase in comparative store sales, thanks to its jeans category. With sustainability being the centre of conversation in fashion and apparel industry, Levi’s launched its F.L.X. technology– a laserpowered process that allows consumers to customise a unique distressed finish on their jeans. By giving consumers the opportunity to personalise their designs, laser distressing could be used as a means to create thousands of finishes currently being achieved through laborious traditional methods like sanding. n
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AppArel / AEPC Seminar Report
AEPC Bangalore Seminar on “Strategies for Financial Risk Management for Apparel Sector”
AEPC Bangalore organises seminar on Strategies for Financial Risk Management for Apparel Sector
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EPC Bangalore organised a seminar on “Strategies for Financial Risk Management for Apparel Sector” on November 30, 2018. The seminar was organised in collaboration with M/s.
Edelweiss Finance and National Stock Exchange. Jagadish N Hinduja, EC Member, AEPC delivered a special address and appreciated the efforts made by AEPC and suggested that the council should continue to organise such seminars and workshops for the benefit of the apparel industry. n Mr. Jagadish N Hinduja, EC Member, AEPC gave special address in the Seminar
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AppArel / Compliance
Accord severs ties with 532 garment companies
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ccord has severed business ties with 532 garment factories for their alleged poor progress in remediation. Some of these factories are big and compliant, owned by the leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) The Accord on Fire and Building Safety in Bangladesh, the platform of more than 200 mostly European-based retailers formed to design a safe and healthy garment industry in the country, is due to leave Bangladesh on November 30 after five and a half years. Although the platform has been trying to extend its tenure for three more years to see through the remediation works in the factories it has inspected. But it has been met with
resistance from the government and factory owners. By then, if the 532 factories do not complete their remediation works they would become ineligible to supply to the Accord’s over 200 signatory brands. The owners of these factories have already spent Tk 5 crore to Tk 30 crore for inspection and remediation of a factory. n
UK retailers pledge to stop slavery in textile trade
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op retailers in the UK like John Lewis, Marks &Spencer and Next have agreed to support moves to stop modern slavery in textile trade. The retailers will raise awareness to prevent slavery, protect vulnerable workers and help bring more criminals to justice. Businesses in the UK with a turnover of more than £36 million have to publish annual statements setting out what they are doing to stop modern slavery. But fewer than two in three have complied. Anti-slavery operations are at an all-time high in the country. More than 920 live investigations were conducted by the police in September, in excess of 2,000 victims. In October thousands of businesses were warned they could face action if they failed to meet legal obligations. The UK has pledged £40 million to aid more than 500,000 people around the world who have either survived modern slavery or are at risk of becoming victims. The support will address slavery and trafficking in countries with a high prevalence of these crimes in South Asia. n
EU restricts use of 33 textile chemicals
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ased on recommendations by the European Chemicals Agency and following broad consultations with stakeholders, the European Union (EU) has restricted the use of 33 hazardous substances in clothing, footwear and other textile articles. This will protect the health of European citizens by limiting their exposure to CMR chemicals—substances classified as carcinogenic, mutagenic and toxic for reproduction—that may be “particularly harmful” when in frequent contact with human skin. The EC had originally considered 286 substances, which textile-trade groups such as the European Apparel and Textile Federation, Independent Retail Europe and the International Wool Textile Organisation balked against in 2016, calling the expansive scope of the proposal “deeply concerning” and “likely to have a negative economic impact.”The new rules have been incorporated into REACH (Registration, Evaluation and Authorisation of Chemicals) legislation. n
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AppArel / Retail
Future retail spaces to offer high-touch, seamless experience: WSGN study
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WGSN study reveals, emerging attitudes around age, gender and disability is likely to shape the future of retail space. Designing for sustainability will be the key as consumers are becoming increasingly aware of the damage they are causing to the environment. Retailers will
offer technology-led experience that will also meet the high expectations around service, personalisation and convenience.
Format stores will be in trend As selling space is shrinks, more retailers will opt for small format stores. These stores allow greater experimentation with flexible merchandising and tightly-curated edits. IKEA for
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example, is experimenting with compact stores in Southeast Asia, opening a 28, 000 sq ft store in Phuket, Thailand. The retailer aims to make smaller investments so it can respond better to demand and be able to open stores in crowded city centres. Since space on the sales floor is limited, fitting rooms are being stocked with behind-the-scenes operating system that pulls items from the stockroom. Similarly, strategies like interstitial fixtures in corridors, queue areas and corners are gaining importance, along with space-saving ideas such as clever ceiling or wall installations, or displays worked into niches and panels.
Wholesome shopping experience the new order Retailers are developing stores around changing consumer attitudes, with spaces and experiences that encourage a mental or physical reset. Lululemon is introducing meditation space at its new store near Rockefeller Centre in New York. The concept store features cushioned “Zen pods” where visitors can listen to one of 12 self-guided meditation recordings. The US brand has just opened a pop-up experiential space in New York called Life Coach, dedicated to self-improvement. Visitors can book in for free sessions with tarot card readers, astrologists and mystics, or play games and partake in activities that encourage self-expression.
Sustainability to agenda Gen Z and millennials want to preserve their items for long, and are willing to pay to keep them in good condition. This is driving new aftercare and product preservation strategies, such as specialist sneaker cleaning, bag and shoe repair services and in-store laundries. These services help brands to connect more meaningfully with customers beyond the initial transaction and encourage repeat store visits, as well as build sustainable credentials. Department store retailers are dedicating floor
space to product care, with stores like Selfridges and Harvey Nichols incorporating bag repair clinics into their London flagship stores, while Saks Fifth Avenue hosts a space in its men’s department for footwear repair service, The Leather Spa.
Launderettes gaining popularity Branded launderettes are on the rise, extending brand reach across all aspects of the product journey. Denim label Denham already offers in-store washing services, while fashion-focused boutique launderettes such as Celcious in Brooklyn, offer an energyefficient and sustainable approach to washing clothes. Sportswear retailers and activewear brands are incorporating in-store sneaker washing services, as Nike has done at its Moscow flagship, or partner with bonafide sneaker care companies such as Crep Protect or Jason Markk, which in March 2018 opened a stand-alone store in London. A shift towards deliberately simple and pared back store design has emerged, putting the focus purely on the product. Expect this trend to develop with a more extreme move towards completely unbranded spaces, in which retailers aim to reduce unnecessary noise, stripping stores of branding and marketing tools in order to create a soothing, clutter- free environment that puts the consumer in charge. This is changing the relationship that people have with product – with choice being driven by the product’s attributes rather than the branding around them. n
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Rising shopping frequency causes dissatisfaction among online consumers
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s per 2018 Pitney Bowes Global Ecommerce Study, 61 per cent of online retailers and marketplaces, who had prepared for record volumes of orders this holiday season, were disappointed by their experience during last holiday season. Consumers cited post-purchase experiences, including items arriving late, expensive shipping, tracking inaccuracies, confusing returns policies, and lost or incorrect items as reasons for their dissatisfaction.
Higher shopping frequency leads to dissatisfaction Though nearly 94 per cent of global consumers shop online; the frequency with which these do so accelerates. Globally, 35 per cent of online shoppers shop at least once a week. In India, 68 per cent of online shoppers purchase from a marketplace as opposed to a shopping with an online brand. Increase in shopping frequency, however, contributes to a rise in consumer dissatisfaction. Individual consumers spend more time shopping online and waiting for products, creating a greater probability for a bad experience. As volumes rise,
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retailers struggle to keep up with demand in terms of physical infrastructure and the technology to manage it effectively.
A toggle between ‘free and fast’ The study states, consumers’ judge their post-purchase experience even before placing orders. At the same time, they demand ‘fast and free’ service with only 47 per cent considering two-day free shipping as fast. Consumers rank ‘free shipping’ as more important than ‘fast shipping’. Globally, 76 per cent consumers prefer ‘free’ over ‘fast’. In India, 56 per cent of consumers prefer free shipping over faster delivery. The study also reveals, 90 per cent online shoppers in the US take some action in response to a bad post-purchase experience. Their reactions range from sharing their frustrations on social media to never purchasing from the offending site again. Among millennials, 30 per cent talk about their poor experience in an online review or social media post, potentially affecting the buying decisions of their entire social networks. Successful high-growth retailers place a greater emphasis on the post-purchase consumer experience than their slower growth competitors. This includes providing services like free returns and day-definite guaranteed delivery. Around 54 per cent of highgrowth retailers offer two-three-day free shipping, while 60 per cent of low-growth retailers offer four-seven-day free shipping.
Marketplaces continue to soak up 60 per cent of online purchases reveals the study. This also offers an opportunity to retailers to invest in their brand and delight consumers throughout the shopping and post-purchase experience. Around 61 per cent of online shopping occurs when the consumer knows specifically what brand and product they’re looking to buy. In these cases, more than half prefer to buy from a retailer website over an online marketplace. The US, China, and Japan are the only countries where the number of cross-border shippers increased in 2018. Shoppers who shop cross-border do so more frequently leading to the growth in market. Globally, 12 per cent engage in cross border shopping at least weekly, up from 10 per cent in 2017. n
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AppArel / CoMPLIANCE
Fashion industry responsible for 10 per cent of global carbon emissions
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he State of Fashion report 2018 released by McKinsey & Company reveals, the ecological impact and carbon footprint of fast fashion industry, remains a cause of concern even though the industry has become more environmentally responsible and sustainable.
Textile emissions on the rise The journal Natural Climate Change highlights the total greenhouse gas emissions from textile production stand at 1.2 billion ton annually as of now. The fashion industry is responsible for 10 per cent of the global carbon emissions and, according to UNFCCC,
if the sector fails to adopt sustainable initiatives, its emissions are likely to rise by more than 60 per cent by 2030. As far as carbon footprints are concerned, manufacturing hubs China and India are the two major culprits. More than 60 per cent of textiles are used in the garment industry and a large proportion of clothes are manufactured in China and India, countries which rely on coal-fuelled power plants, increasing the footprint of each garment. Production of polyester and cotton, two most commonly used fabrics in the industry, has a considerable impact on the environment. The production of polyester results in more emissions since the material is produced from fossil fuels such as crude oil. As per estimates, 262 per cent more CO2 is emitted to produce a single polyester T-shirt than a cotton shirt. Therefore, as the Pulse of the Fashion Report 2018
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suggests substituting polyester with its recyclable counterpart is advisable. This not only reduces the toxic substances by 90 per cent, but also energy usage by 60 per cent and emissions by 40 per cent.
Garment longevity and carbon emissions The average number of times a garment is worn before being discarded is 36 per cent compared to 15 years ago. After
use, less than 1 per cent of the material used to produce clothing is recycled into new clothing. An estimated $500 billion worth is lost every year due to this take-make-dispose model. If nothing changes, by 2050, the fashion industry could use more than 26 per cent of carbon budget associated with a 2C pathway, warns Ellen MacArthur Foundation. But, it is possible to reduce the industry’s GHG emissions, says Ellen MacArthur Foundation. The foundation advises doubling the number of times a garment is worn. This would reduce GHG emissions by 44 per cent. Using low-carbon materials and production processes (including renewable energy and energy-efficiency measures) would further reduce the GHG emissions of a new system.
An alliance to promote sustainability Recently 10 UN nations came together to establish the UN Alliance on Sustainable Fashion which will be launched in March 2019. This alliance will target the private sector, governments of UN member states, NGOs and other relevant stakeholders to make sustainability the next fashion trend. n
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AppArel / Sustainability
CITI evaluation report ranks Levi’s as the world’s top apparel brand
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ccording to the fifth version of the Green Supply Chain CITI (Corporate Information Transparency Index) evaluation report, published by Institute of Public and Environmental Affairs (IPE ), Levi’s has been ranked as the world’s top ranked apparel brand. The next best placed apparel brands include C&A, followed by Nike, Primark, H&M, Inditex and Target. The report indicates that the apparel industry is pressing suppliers in Asia harder to disclose information on textile pollution. The report aims to use environmental big data to generate solutions to help leading multinational and local brands develop green
ZDHC program gets seven new members
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even new companies have joined the ZDHC Roadmap to Zero Program. UK online fashion company, Asos recently joined as a signatory brand. Other new members of the program include Bangladeshi denim business, Denim Expert, Chinese viscose business, Sateri, Indian chemicals business, Meghmani Dyes and Intermediates LLP, Indian apparel business Eastman Exports Global Clothing and Sustainable Textile Solutions (STS). These companies will adopt the ZDHC tools, such as the ZDHC Manufacturing Restricted Substances List (ZDHC MRSL) and the ZDHC Wastewater Guidelines, and implement them into their value chains. With the additional organisations, the total number of ZDHC Contributors is 116. The program aims to implement sustainable chemistry, drive innovations and best practices in textile, apparel and footwear industries to protect consumers, workers and the environment. The ZDHC is an industry collaboration of brands, value chain partners and associates aimed at driving the textile and apparel industries towards more sustainable chemistry. n
procurement on a greater scale. In all, 306 brands were ranked, 76 in the textile and apparel sectors. The latest report indicates a huge spike in the number of apparel brands that use the IPE’s database to screen their Chinese suppliers for environmental compliance and push them to disclose information. The report also shows that 10 apparel retailers have now joined the IPE Green Supply Chain Map, the only tool in the world to openly link leading multinational corporations to their suppliers’ environmental performance. These ten brands include Adidas, Esprit, Gap, Inditex, Levi’s, New Balance, Nike, Puma, Target and Tesco. n
Higg Facility Modules to address value chain inefficiencies
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eleased by Sustainable Apparel Coalition (SAC), the 2018 Higg Facility Modules on Higg.org aims to address value chain inefficiencies, resolve damaging practices, and achieve the environmental and social transparency consumers are demanding. Factories can use the updated Higg Facility Environmental Module (Higg FEM) and the Higg Facility Social & Labor Module (Higg FSLM), which is accessible online for the first time, to evaluate value chain sustainability performance. The Higg FEM assessment measures factories’ environmental management systems, energy use and greenhouse gas emissions, water use, wastewater, emissions to air, waste management, and chemical use and management. The new web-based Higg FSLM introduces the industry’s first standardised self-assessment for measuring factories’ social and labor performance. Informed by the Social and Labor Convergence Project, the SAC developed the Higg FSLM to evaluate recruitment and hiring practices, working hours, wages and benefits, employee health and safety, and community engagement, among other areas. The SAC is working towards accreditation as a host of the converged assessment and will release a scored version of Higg FSLM at the end of 2019. n
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AppArel / Sustainability
PHMA urges govt to demand duty free access to Chinese markets
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akistan Hosiery Manufacturers & Exporters Association’s (PHMA) has urged the Government of Pakistan to demand duty free access to Chinese to allow imports of finished fabric under DTRE and stitching machinery and after conversion of this finished fabric into garments, Pakistan will export these value added garments to China with zero per cent duty at par with ASEAN countries. Pakistan can achieve a milestone in value added textile exports in view of China’s import of value added textile Items to the tune of $7,000 million. However, Pakistan exports to China amounted to only $100 million. n
A new approach needed for textile recycling
Brands find selling eco-friendly products difficult
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rands that haven’t woven sustainability into the fabric of what they do are finding themselves hard-pressed to get consumers to pay up for a more eco-friendly product. Geetanjali Woollens has been recycling postconsumer clothing for 40 years. The company gathers post-consumer apparel from waste
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ecycling of blended fabrics is a major challenge that the industry faces today as the various fabric components need to be separated. The process requires extensive investment as recycling technologies enabling recycled materials need to be developed to become as profitable as new ones. A new approach needs to be adopted right from the beginning of the process. Choosing designs wisely can reduce the environmental impact of clothes, and improve their circularity. Each garment is likely to generate between 20 per cent and 30 per cent of fabric offcuts. For example, only 30 per cent of a pair of jeans can be recycled, due to the stitching and rivets. Single material fabrics would make recycling easier. Using sustainable materials right from the start of the process would also go in the same direction. Downstream marketing strategies engage end consumers, allowing them to co-design products that meet their tastes and expectations and increase their loyalty, and actually extend the life cycle of garments. n
collectors in the US, Europe, Australia and Japan, sorts it by fiber composition, then sorts it again by color. Each color gets shredded into fiber, spun into yarn and finds its way into sweaters, accessories, beanies and socks— each produced without dyes and chemicals, and substantially less water. The brand finds that retailers take in just a fraction of the nearly 25,000 kg of clothing that it recycles every day. This is not sustainable as the company has to pay its workers and bills. n
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AppArel / Skilling
Focus on skills development must for apparel industry growth
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rowing consumer needs are pressurising retailers and manufacturers to deliver products faster, cheaper through transparent and sustainable supply chains. Consequently, organisations across the value chain are facing a dire need for skilled workforce and their training and development. Training, though happening within companies, is not enough to keep up with
the lack of skilled workers. There is high dissatisfaction with the content and modes of training provided. Furthermore, the investment provided for the training is not adequate.
Scope for career development a must A recent survey reveals, one of the biggest complaints from brands and vendors is they have trouble hiring people with the right skills. Around 62 per cent said they are struggling to fill certain positions. Apparel businesses need to ensure that younger people see the apparel industry as an attractive place to
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focus their careers. According to the 2018 LinkedIn Learning Workplace Learning Report, 94 per cent of employees would stay at a company longer if it invested in their career development. Around 91 per cent managers see training as important for the professional development of their employees, while 88 per cent viewed it as important for maintaining job satisfaction. Only 16 per cent managers surveyed revealed their companies have undertaken skill assessments of their whole workforce. These companies have done skill assessments of their whole workforce employees. Around 49 per cent managers, and 50 per cent of others had taken some sort of company sponsored training over the past 12 months, while only one-third work for companies that use a Learning Management System.
Employee training faces budgetary issues Although there is an awareness about the need for training budgets aren’t matching. Less than 30 per cent of those surveyed have seen their budgets increase in the last two years, and over 70 per cent think that more investment is required. Additionally, only 38 per cent see a planned increase in investment in training over the next two years. Many businesses hold back due to the lack of a clear method for measuring the effectiveness of training. This suggests that there is no consistent way of measuring the success of training, and thus no way to justify further investment.
Restoring old skills Some functional areas require more ongoing training, with
technical design and product development ranking the highest. This is followed by
technical apparel making, quality control, production and process management, retail operations and visual merchandising ranked the lowest. Brands are planning to increase onshoring as they face new challenges around trade rules, currency fluctuations and speed to market. Additionally technology advances are lessening the number of workers. There is a pressing need to train new talent into local industry in order to restore what many view as dying skills. This is a particularly urgent challenge for specialised skills like bramaking, hosiery and pattern making. n
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AppArel / INSIGHT
Economists, policy makers divided on the need for import regulation
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conomists across the world are at loggerheads with policymakers on whether countries should impose import duty on specific products to regulate imports. While many countries, including India, are actively considering such measures, economists argue governments should refrain from regulating trade flows. Free imports expand production quickly while boosting the purchasing power of consumers by allowing them to buy high-quality goods at low price. If trade flow is unhindered, the law of comparative advantage forces countries to specialise and trade in products they have some competitive advantage in. This benefits consumers and producers of both exporting and importing countries.
High import duties hinders growth China has repeatedly proved that comparative advantage, in most cases, can be developed in a short period by offering several incentives. In the 1980s, China had no domestic electronics and computer industry and imported everything for meeting local needs. Raw materials and low-end components for these units were sourced from ASEAN and while the components requiring advance manufacturing came from Japan, Korea and Taiwan. This model made China the leading exporter of electrical machinery, electronic items and telecom equipment by 2005. In the next phase of growth, the country reduced its dependence on the GVC model by manufacturing everything needed inhouse. China applied a similar strategy for organic chemicals and electrical machinery to emerge a world leader. While average import duties are low for
many developed countries, the US, the EU and most other developed countries charge high import duty on products of interest to developing countries and grant calibrated access only. The EU and the US charge 10-20 per cent import duty on Indian apparel and shoes. Japan charges 300 per cent duty on rice. Many European countries charge seasonal import duties on agriculture products.
Need for import substitution The need is to reduce over-reliance on one country for products related to health, food or national security. For instance, India imports over 90 per cent of its requirement of Active Pharmaceutical Ingredients (APIs) from China. Realising this, China sharply increased prices in the past two years. India therefore, needs an urgent strategy for import substitution. China accounts for more than 95 per cent of Indian imports for items such as blankets, bed linen, artificial flowers, kitchenware, baby carriages, clock movements, tricycles, festival items, combs, vacuum flasks, candles, etc. As these are low technology, labour-intensive products, they can be manufactured even locally. Indeed import substitution cannot be an option to innovation. For instance, a high-technology product like a driver-less car can only be produced in a country that has with in-depth institutional knowledge of precision fabrication, electronics, robotics, design, IT and many more streams, it cannot be manufactured in countries like Brazil, India or China. Quick comparative advantage cannot be developed in a short period for such products through import substitution. n
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AppArel / GEMA Report
Vinod Dhawan, President, GEMA shares his plans for the industry
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Mr. Vinod Dhawan, President GEMA.
EMA (Apparel Exporters & Manufacturers Association) and GEA (Garment Exporters Association) recently merged to form the GEMA (Garments Exporters & Manufacturers Association) .Vinod Dhawan, President, GEMA has been the Vice Chairman of the Eastern Region of AEPC, Member of the IGFA Committee, Past President, AEMA, Trustee JNPT and Member, Advisory board Indian Airline. He elucidates on the vision and activities of GEMA to Apparel India Q. What was your objective behind forming the Garment Exporters and Manufacturers Association (GEMA)? Since the last three decades, AEMA and GEA have been operating as two separate bodies having the common objective of fostering export growth in India. We combined both these bodies to form GEMA with three common objectives: • To support initiatives to raise the awareness of Indian exporters and manufacturers. • To be the bridge between the members, industry bodies and regulators to ensure that right governance and regulatory compliances are in place • To improve productivity and make digitisation tools available apart from best practices in the industry. GEMA (previously initiated by AEMA) as a registered assessment body with AMHSSC is in a strong position to provide skilled man power. Q. What are the challenges before the industry? The challenges that the industry faces today are a result of inadequate policy support, digital adoption and high costs. They include domination
by small-scale players, seasonal production and poor R&D. The Indian Industry is largely confined to small scale production which is a result of faulty policies in the past. In addition, poor skill sets and lack of modern technology resulted into low efficiency & poor quality. India is most known for cotton fabrics, which confines it to seasonal production focused on summer collections. Unfavourable import duties make it difficult to source special fabrics, in particular, synthetics to make winter clothing, which has a much higher volume than summer collections. Besides we also face other challenges such as high logistic costs, wages and duties which have been detrimental to supporting scale. Q. As the President of GEMA, what steps are you planning to take to address these challenges? In order to fuel the export industry, we need adequate policies where all factors are addressed. Unfortunately, the current relaxations are a one-step measures and more needs to be done to bring the desired reform. I would like to mobilise the government into action. We will participate in policy advocacy to ensure that comprehensive policies that address the issues at a ground level are implemented. I plan to draw upon industry insight, expertise and experience to form solutions that fuel the industry into growth mode. Q. What are the names which comprises the Managaing Committee of GEMA? The newly Management Committee consist of industry leaders of the region. Beside myself, Mr. Sudhir Sekhri, Trendsetters Vice President, Mr. Animesh Saxena-Neetee Clothing pvt ltdHonorary General Secretary,Mr. Satish lakhina,Maya Export Corporation-Honorary Treasurer,Mr.Ashok Logani-Instyle Exports Pvt Ltd,Mr. Anil Peshawari-Meenu Creations,Mr. Anil Verma-Monica Garments,Mr. Gautam Nair-Matrix Clothing,Mr. G S Mdan-Madan Trading Co,Mr. Harish Ahuja, Shahi Exports pvt ltd,Mr. H K L Magu-Jyoti Apparels,Mr. K K Kohli-Orient Craft Ltd,Mr.Lalit Gulati-Modelama Exports Ltd,Mr. Lalit Thukral-Tewnty Second Miles,Mr. M K Jain-Chelsea Mills,Mr. Manoj Lal-Milano International(I) Pvt Ltd,Mr. Rajiv PremVishesh Overseas,Mr. Rakesh Vaid-Usha Fabs Pvt Ltd, Mr. Tony Uppal-Pee Empro Exports Pvt ltd,Mr. Vijay Jindal-SPL Industries,Mr.Vinit Sethi-Orient Fashion,Mr. Virender UppalRicha Global Exports Pvt Ltd,Mr. Ashish Nath(Co-Opted Member)-General Commerce Ltd,Mr. Deepak Seth(Co-Opted Member)- Pearl Global Industries ltd,Mr. Hari Kapoor(CoOpted Member)-Allied Garments Exports Ind,Mr. Prithvi Manaktala(Co-Opted Member)-Cosmique Pvt ltd. n APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / MINISTRY NOTIFICATIONS
Ministry Notifications Sub.: Mandatory RFID Tag for movement of goods in Uttar Pradesh w.e.f. 1st November, 2018 The Commissioner of State Tax U.P. vide notification No.- E-way Bill- R.F.I.D./sachaldal/2018-19/commercial tax hereby direct that such transporters, who transport such goods for which, information relating to the said goods as specified in FORM GST EWB 01 is required to be furnished electronically on the common portal, before transportation of such goods in the territory of Uttar Pradesh, shall obtain a R.F.I.D. Tag and get the said R.F.I.D. Tag embedded on wind screen of the conveyance carrying such goods and get it mapped to the E-way bill system
Sub.: Extension of the validity period of EPCG Authorisation DGFT in its Public Notice No. 47/2015-20 dated 16th November, 2018 has extended the EPCG Authorisation from 18 months to 24 months.
Full Notification http://dgft.gov.in/sites/default/files/P.%20No.%2047%20english_0.pdf
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AppArel / GST UPDATE
GST Update 1. Clarification on certain issues related to refund: As per Circular No. 70/44/2018 -GST dated 26.10.2018, amount of Input Tax Credit debited under sub-rule (3) of rule 89 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”) is required to be re-credited to the electronic credit ledger of the applicant by using FORM GST RFD-01B and the taxpayer is expected to file a fresh application for refund. The exporters who have received capital goods under EPCG to claim refund of IGST paid on exports. 2. Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16: As per Circular No. 69/43/2018-GST dated 26.10.2018, on standard operating procedure for Processing of Application for Cancellation of Registration submitted in form GST REG-16. 3 Issues pertaining to registration as a casual taxable person & recovery of excess Input Tax Credit distributed by an Input Service distributor: The CBIC issued the Circular No. 71/45/2018-GST dated 26.10.2018, Clarification of issues under GST related to casual taxable person and recovery of excess input tax credit distributed by an input service distributor. 4. Clarify the procedure in respect of return of time expired drugs or medicines: The goods which have crossed their date of expiry are colloquially referred to as time expired goods and are returned back to the manufacturer, on account of expiry, through the supply chain. In this case the person returning the time expired goods is a registered person (other than a composition taxpayer), he may, at his option, return the said goods by treating it is as a fresh supply and thereby issuing an invoice for the same (hereinafter referred to as the, “return supply”). The recipient of such goods shall be eligible for ITC of return supply. As per sub-section (1) of Section 34 of the CGST Act the supplier can issue a credit note where the goods are returned back by the recipient vide Circular No. 72/46/2018-GST dated 26.10.2018.
5. Taxpayers whose registration has been cancelled on or before the 30th September, 2018 time to furnish final return in FORM GSTR-10 till 31st December, 2018: The persons, whose registration under the said Act has been cancelled by the proper officer on or before the 30th September, 2018, as the class of persons who shall furnish the final return in FORM GSTR-10 of the said rules till the 31st December, 2018 vide Notification No. 58/2018-Central Tax Dated 26.10.2018. 6. Extends the time limit for furnishing the declaration in FORM GST ITC-04 for the period from July, 2017 to September, 2018 till 31st December, 2018: The Central government hereby extends the time limit for furnishing the declaration in FORM GST ITC-04 of the said rules, in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another, during the period from July, 2017 to September, 2018 till the 31st day of December, 2018 as per Notification No. 59/2018-Central Tax dated 26.10.2018. 7. Exemption to a casual taxable person making taxable supply of handicraft goods from the requirement to obtain registration but e-way bill is required: As per notification No. 32/2017-Central Tax dated 15.09.2017, stated that such person are not liable to obtain GST registration till the turnover reaches 20 lakh in a financial year (ten lakh rupees in case of Special Category States, other than the State of Jammu and Kashmir). The casual taxable persons mentioned in the notification shall obtain a Permanent Account Number and generate an e-way bill in accordance with the provision of rule 138 of the Central Goods and Service Tax Rules, 2017. The exemption shall be available to such persons who are making interstate taxable supplies of handicraft goods. The above said notification has been superseded by the current Notification No. 56/2018-Central Tax Dated 23.10.2018 but e-way bill is required.
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AppArel / aepc event calendar
CALENDAR OF EVENTS -
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6
February, 2019, France
2019
March, 2019, China
Premiere Vision Paris
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July, 2019, HONG KONG
Intertextile Shanghai/ Yarn Expo
8
July, 2019, JAPAN
Hong Kong Fashion Week at Hong Kong
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August, 2019, USA
India Trend Fair (ITF) at Tokyo, Japan
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September, 2019, France
Sourcing at Magic, Las Vegas, USA
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October, 2019, SPAIN
WHO’s Next, Paris – France
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November, 2019, AUSTRALIa
India Apparel & Accessories fair at Madrid, Spain
International Sourcing Expo Australia
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BOOK YOUR SPACE
4-7 Febuary 2019
Las Vegas Convention Centre, 3150 Paradise Road, 89109 Las Vegas, Nevada, USA
This one-of-a Kind Convergence of Fashion’s Global Supply Chain connects Established and Emerging Brands to an unparalleled network of Manufacturers, Materials, Technology, Logistic Solutions & Talent
Contact for further details : Mr. K S Bisht, Jt. Director (Fairs & Exhibition) Apparel Export Promotion Council Apparel House, Institutional Area, Sector - 44, Gurgaon-122003, Haryana, (India) Tel: +91 124 2708156(D), 2708000-003, Fax: +91 1242708004, Mobile: +91 9810527747, Email : kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section) Limited Stalls available on First Come First Serve Basis
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