EAI 01 ISSUE 07
` 100
Market Focus
UK, as an apparel market BraND case stuDY
Zara: success secret decoded
LuXurY
India emerging as a luxury market
AppArel eXpOrT prOMOTION COUNCIl MAGAZINe
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AppArel / Chairman’s Message
Dear Friends,
T
he Indian apparel industry, at the close of the first half of this financial year, finds itself at a rather unenviable position of being one of the few sectors, which has not been able to come out of the red, in terms of export performance. The favorable rupee has improved exports in rupee terms, but exports in dollar terms may need a few more months to recover. However the silver lining is the positive performance in the major markets like US and EU. With a good demand position in major markets, the imminent peak season can finally take the exports northwards. The industry is eagerly awaiting the new RoSL rates that can be a game changer in this market, where the only constraint before the Indian exporter is the cost competitiveness. AEPC submitted its data and representation for Determination of All Industry Rate of Drawback 2018-19 for readymade garments for reimbursement of actual incidence of custom duties suffered on imported inputs. AEPC also submitted representation to PMO office to review and consider all embedded taxes. The new rates are expected by next month. Campaign to create awareness on Swachhata in apparel sector Apparel Export Promotion Council (AEPC) and its members across the various apparel clusters observed the “Swachhata Hi Seva” campaign. The campaign was launched on September 15, 2018 with Union Minister of Textiles, Smriti Zubin Irani joining the okhla industry in cleaning the garbage around Okhla apparel cluster. The entire north India’s apparel associations like GEA, OGTC, AEMA, NAEC, DEA, along with AEPC officials, students & faculties of ATDC and workers
from the local factories also joined the campaign . The minister urged for a more sustained effort to keep the clusters clean by recycling waste through innovative usage. At the cluster level, AEPC is creating awareness on Swachhata in apparel factories and identifying dirty clusters drive with the support of the local bodies / municipal corporations. India and Sri Lanka representative discussion to increase trade AEPC hosted B2B meeting between representatives of India and Sri Lanka on September 26, 2018 at Apparel House, Gurugram. The discussions were aimed at increasing the trade between the two countries. Industry representatives from both sides agreed that it is time to look the beyond tariff issues and explore the possibility of working together as a partner on future collaborations for product and supply chain development. 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 07
` 100
MARKET FOCUS
UK, as an apparel market BRAND CASE STUDY
Zara: Success secret decoded
04 | The Broadcast
India’s Ready-Made Garment (RMG)Export Update for FY (April-August) 2018-19
LUXURY
India emerging as a luxury market
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
| October 2018
05 | The Broadcast
India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-July) 2018-19
06 | aepC evenTs
AEPC holds B2B interactions between India and Sri Lanka.
08 | LuXury CHAIRMAN AEPC Mr. HKL Magu CHAIRMAN EP Mr. Sudhir Sekhri ADVISOR AEPC Mrs. Chandrima Chatterjee PUBLISHER Apparel Export Promotion Council
India to emerge a strong market for luxury brands
10| Brand reTaiL
• Indian brands shift focus to material quality strategy • Gap Q2 sales up seven per cent • Urban Outfitters Q1 sales up ten per cent
11| Brand reTaiL
• Google to enter e - com space in India • Primark to generate 5.5 per cent more sales than last year • Inditex to sell online by 2020
12 | Case sTudy
Zara: Success secret decoded
16 | reTaiL
Gap Inc faces challenging times ahead
18 | Business
• Indian apparel market to reach $155 billion by 2022 • India likely to overtake China in textiles 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, Prerna Sharma Graphic Designer - 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
19| Business
• India to change the rules of origin clauses in FTAs • Recovery in sight for Indian textile industry • India: Rising yarn prices worry hosiery makers
20 | Cover sTory
market focus: UK to remain a lucrative market for Indian apparels against all odds
25 | eXporTs
• US-China trade war benefits India exports • Falling rupee boosts India’s exports sector
26 | eXporTs
• Tirupur knitwear exports decline by 13% • India to double exports by 2025
27 | eXporTs
• India’s apparel exports to grow by 1-2 % y-o-y for FY19 • Bangladesh, Sri Lanka to jointly make eco-friendly jute apparel • Kerala’s weavers need six months to repair looms
28 | Business
Indian garment manufacturers need to speed up to grab global business
30 | Trade TreaTies
NAFTA 2.0 to change US apparel sourcing norms
32 | Trade TreaTies
• India and Singapore review FTA • US urge India to rethink trade barriers and tariffs • Trump threatens to withdraw from the WTO
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33 | Trade Treaties
• Indian trade barrier to hurt Bangladesh exports • US-China trade war heats up with more tariffs on Chinese goods • India proposes stricter rules to prevent Chinese goods flooding the country
34 | Trade War
US-China tariff war sees newer sourcing destinations emerging strong
36 | Imports
• India’s apparel exports to Italy still minimal • UAE’s apparel imports from India fall by 59 per cent • Trouser imports of EU increase by 7%
37 | Imports
• US jeans imports increase in H1 • India imports 56% more RMG from Bangladesh during July-November 2017
38 | AEPC events
Good response for the Indian Pavilion at ATSC
40 | Insight
Fashion adopting a functional approach
43 | Trends
• Companies prefer cotton over synthetic apparels • Denim back in fashion in the US • Nearly 24 per of US apparel sales generated by Athleisure
44 | Trends
Demand for temperature sensitive clothing on the rise
46 | Infrastructure
• Manipur upgrades three apparel making centres in Imphal • Kay Ventures to convert Karur into a global knitwear center
47 | Infrastructure
• YEIDA to set up textile park to boost industry growth • Arvind to outsource textile production in the next five years • UP launches ODOP scheme in Lucknow
48 | Tech Trends
Apparel Technology: New fabric handling technologies a time saver
50 | AEPC events
AEPC to launched Swachhata Hi Seva Campaign
52 | sUsTainaBiLiTy
Need for Fast Fashion retailers to tighten their eco goals
54 | certifications
Sustainable materials, certifications driving apparel industry
56 | events
• India to participate in Footwear and Leather Show in Australia • IAF to hold World Fashion Convention in Netherlands this October • India to partner Germany at Ambiente 2019 Fair in Frankfurt
57 | aepc event calendar
CALENDAR OF EVENTS - 2018
58 | NOTIFICATIONS 59 | GST Update APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / the broadcast
India’s Ready-Made Garment (RMG) Export Update for FY (April-August) 2018-19 India’s RMG Exports RMG exports were to the tune of USD 1292.18 million in August 2018 with the decline of -3.35 per cent against the corresponding month of August 2017, which was USD 1336.95 million
In rupee term export for the Month of August 2018 was ` 8986.67 cr. as against ` 8552.24 Cr. in August 2017 with the growth of 5.08 per cent.
India’s RMG export to World in the April-August of 2018-19 was to the tune of USD 6612.85 mn. which has decreased by -12.07 per cent compared to the same period of previous financial year. During April-August 2017-18, India’s apparel exports were to the tune of USD 7520.3 mn.
India’s RMG Export to World Month
FY 2017-18
FY 2018-19
MoM Growth of 2018-19 over 2017-18 (%)
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
48409.54
7520.3
44846.83
6612.85
-7.36
-12.07
April-August
Source: DGCI&S, Kolkata, 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-July) 2018-19 INDEX OF INDUSTRIAL PRODUCTION
Month
Manufacture of textiles
MoM Growth Rate Manufacture of (In %) 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
Total April-July
116.4
1.3
147.9
-2.8
Summary
117.9
143.8
Source: CSO, 2018
• Manufacturing of Textiles has shown a growth of 2.9% in July, 2018 and growth of 1.3% for the period of April-July, 2018-19 • Manufacturing of Wearing apparel has shown a growth of 9.8% in July, 2018 and decline of -2.8% for the period of April-July, 2018-19
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AppArel / AEPC events
AEPC holds B2B interactions between India and Sri Lanka.
A group photograph of Sri Lankan delegation with representatives from India
A
EPC recently held B2B interactions between India and Sri Lanka that were aimed at increasing trade relations between the two countries. Representatives from both sides agreed that it is time to look the beyond tariff issues and explore the possibility of working together as a partners. India proposed that Sri Lanka should share its knowledge on microfiber fabrics and products, technology, etc while India should provide knowledge on value added products, designing and products development. The meeting commenced with the opening remarks from Aditi Das Rout, Trade Advisor,Ministry of Textiles in presence of AG NimalKarunatilake, Actg. Addl. Director General, Department of Commerce, Sri Lanka. It was attended by, UpekkhaSamaratunga, Minister (Commercial), Sri Lanka High Commission; SB Nanda, Under Secretary, Ministry of
India - Sri Lanka B2B meeting at Apparel House, Gurgaon
Commerce, New Delhi; HKL Magu, Chairman, AEPC; Sudhir Sekhri, Chairman-EP, AEPC; Gautam Nair, EC Member, AEPC and representatives from Sri Lanka Apparel, Brandix Apparel Ltd, Sri Lanka; MAS Brands India Pvt Ltd, Sri Lanka; Hirdaramani, Sri Lanka; Timex Garments, Sri Lanka; Page Industries, Sri Lanka; CMAI, Vardhman Textiles, CITI, Arvind Ltd., and TEXPROCIL The discussions aimed to increase the trade between the two countries. The meeting ended on very positive note. HKL Magu, Chairman, AEPC thanked the delegation from Sri Lanka and proposed for future collaboration and B2B meetings with Sri Lanka. n
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AppArel / Luxury
India to emerge a strong market for luxury brands
I
ndian luxury market needs to think in terms of size and growth, at least 10 years ahead of its time. Luxury brand Louis Vuitton opened its first store in China in 1992 but could offer reasonable sizes only 20 years later. The brand opened its first store in India in 2003 and is still few years behind when it could offer the right sizes. Standardising luxury by considering optimum price for experiential and personal luxury goods, BCG classifies handbags above €1,000, shoes above €300, restaurants spend of above
€150 and wines and spirits – more than €100 as true luxury. The luxury market in India is approximately $12 billion-$15 billion or 1.5 per cent of the world market. China, on the other hand, makes up 40 per cent of the world luxe market. One of the biggest constraints for Indian luxury market is talent. An important part of the experience is the in-store staff. There are simply not enough trained people available. Even the pool available is more deferential than an informed seller of luxury.
Change in perspectives Popular perception that luxury consumers are old, live in
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AppArel / Luxury
metros and predominantly female needs to change. Although dealerships for luxury car showrooms exists in cities like Jalgaon and Coimbatore, but the consumers in most cities do not find the offer in India compelling and end up purchasing goods either in Singapore or London, where they get a better range, service standards and retail environment. The role of women as prospective buyers in both luxury and premium categories is changing. With the percentage of women getting education rising higher than boys increasing since 2015, the future consumerbase for luxury and premium goods is likely to be female-centric. In China, this segment of young working women is amongst the most important demography in luxury.
The India advantage The Chinese luxury market is much bigger than the size of Indian luxury market and is growing at a healthy clip. The spread in China is much broader – 50 per cent of luxury consumers are beyond the Top-15 cities. India also being a big country, has a potential of vast spread beyond Tier I cities. Most global luxury brands worldwide started as craft brands a century or more, ago. Bulgari, for example, was once a single jewellery store and Burberry an outdoor wear manufacturer; today these are global iconic brands across categories. India also has potential to build few luxury brands in future due to its ideal business climate. High end apparel or jewellery, etc are some categories where true Indian luxury brands may emerge. Some brands in India have already started on that journey and are likely to attain global reach and appeal shortly. Historically, luxury brands invest a lot in print for brand building. In France, LVMH is the biggest print advertiser. In contrast, a lot of brand building in China happens online. India is likely to adopt the mid-approach by focusing less on TV as it finds less relevance in luxury owing to increased fragmentation and also being a low attention medium. n
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / Brand Retail
Indian brands shift focus to material quality strategy
I
n a bid to counter competition from Ikea, domestic players have shifted their focus from price point strategy to material quality strategy. Some furniture makers are manufacturing a roll-pack mattress that can easily fit into the size of a TV box bringing the shipping cost down by 70 per cent. They hope to ship more products at a low cost across India and the waiting period is less than three days. One startup has even opened an experiential
center, where customers can rest for 30 minutes before buying the product. Another startup visits customers at their homes. This helps a brand understand customer expectations and customize their products accordingly. n
Gap Q2 sales up seven per cent
T
he Q2 sales of Gap Group have increased by 7.5 per cent. Its US sales rose by 9.3 per cent. However, the group’s growth has slowed since Q1 due to its limited range. It discourages people from visiting and purchasing. It also leads to the company resorting to continuous discounting to stimulate sales. The brand needs to establish a clearer identity and a sense of purpose like other apparel brand. The total sales of its Old Navy brand, aided by strong consumer economy, increaqsed by 13.7 per cent. The division continues to produce nice fashion edits at good price points. It is also adding plus sizes to the range. Another brand Banana Republic also reported positive results n
Urban Outfitters Q1 sales up ten per cent
T
he first quarter sales of Urban Outfitters rose by 10 per cent. This growth was spurred by higher consumer spending, despite a longer than normal winter, as well as easier comparisons versus the same period last year. The company expects to generate substantial growth in the revenue and earning metrics in the second quarter. Its sales are expected to grow by 12.2 per cent and EPS by a whopping 75 per cent. The company’s total markdown rate during the first quarter was the lowest than that of any quarter in the last ten years. This resulted in higher average unit retail, and eventually positive store comps. A better assortment, higher consumer spending, and disciplined inventory control also helped the company to offer lesser discounts. Urban Outfitters opened its first freestanding store in Paris in February and its first franchise store in the outskirts of Tel Aviv in April. The company plans to open two additional stores in Europe and facilitate the opening of several additional franchised stores in Israel. n
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AppArel / Brand Retail
Google to enter e - com space in India
G
oogle is planning to enter the e-commerce space in India. This could pressurise the existing players through its higher customer acquisition costs and the latest technologies. Existing players, who do not pay attention to aspects like recommendation engines and the search experience, will be forced to optimise on these aspects. Though Google has an edge in terms of technology platforms, the existing e-commerce giants boast of a strong supply chain and customer support. For consumers, the party will continue with lots of deals, discounts and cashbacks. The market will
Primark to generate 5.5 per cent more sales than last year
further ripen up for acquisitions. The big three, Google, Amazon and Walmart-backed Flipkart, flush with big money and investor optimism, will aim to buy out smaller players to beef up their e-commerce war chest in India. Start-ups in specialised niche domains such as medicines, cosmetics, food, furniture, fashion will continue to grow, acquire scale and ultimately get picked up by the big three. However, there wouldn’t be much space for horizontal e-commerce players operating in multiple products and service categories; enabling strong vertical players to emerge in niche categories. n
Inditex to sell online by 2020
S
pain’s Inditex SA plans to sell its Zara and other brands online within the next two years. The retailer currently has stores in 96 countries and e-commerce in about half of those. It has been warned by Morgan Stanley analysts regarding the drop in its rankings from great to good; Credit Suisse too has
P
rimark, in its recent trading update, has stated that it would generate 5.5 per cent more sales than last year at constant currency of 6 per cent at actual exchange rates). But, this will be offset by a 2 per cent decline in like-for-likes (LFL). The company stated that its full year sales in the UK are expected to be 6 per cent higher than the last year. Its share of clothing market has also increased significantly. The brand’s stores in Spain, Portugal and Italy have delivered strong sales growth in the year. Its LFL sales have decreased due to a decline in northern Europe where the unseasonable weather led to difficult retail conditions. Despite this, sales in northern Europe were well ahead of last year driven by increased selling space. The company’s operating margin during the period declined to 9.8 per cent from 10 per cent year-on-year, due to the adverse effect of the US dollar exchange rate on purchases. But margin in H2, driven by the weakening of the US dollar exchange rate, is likely to be more than in the first half and last year. n
criticised its growing shift to online sales. The company’s shares too have dropped by 14 percent this year. E-commerce is the source of 10 percent of its sales, having grown more than 40 percent last year. Inditex’s ailing rival, Hennes & Mauritz AB, aims to add online sales in all its brick-andmortar markets eventually, and expand in other countries as well. The H&M chain has e-commerce in about 50 markets and stores in about 70. n
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / Case Study
Zara
Success secret decoded Customer insights are the holy grail of modern business, and more the companies know about their customers, the better they can innovate and compete. This is the winning formula that Zara has been using to beat the competition and remain successful over the years. An intriguing case story by Martin Roll Company…
Z
ara is one of the world’s most successful fashion retail brands. With its dramatic introduction of the concept of fast fashion retail since it was founded in 1975 in Spain, Zara aspires to create responsible passion for fashion amongst a broad spectrum of consumers, spread across different cultures and age groups. There are many factors that have contributed to the success of Zara but one of its key strengths, which has played a strong role in it becoming a global fashion powerhouse as it is today, is its ability to put customers first. Zara is obsessed with its customers, who have defined the company and the brand’s culture right from the very beginning.
The secret to Zara’s success has largely being driven by its ability to keep up with the rapidly changing fashion trends and showcase it in its collections with very little delay. From the very beginning, Zara found a significant gap in the market that few clothing brands had effectively addressed. This was to keep pace with latest fashion trends and offer collections that are a combination of high quality and yet, are affordable. The brand keeps a close watch on how fashion is changing and evolving every day across the world. Based on latest styles and trends, it creates new designs and puts them into stores in a week or two. In stark comparison, most other fashion brands would take close to six months to get new designs and collections into the market. It is through this strategic ability of introducing new collections based on latest trends in a rapid manner that has enabled Zara to beat other competitors. It quickly became the people’s favourite brand, especially with those who want to keep
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AppArel / Case Study
Winning formula
up with fashion trends. Founder Amancio Ortega is famously known for his views on clothes as a perishable commodity. According to him, people should love to use and wear clothes for a short while and then they should throw them away, just like yogurt, bread or fish, rather than store them in cupboards.
Success strategies The media often quotes that the brand produces ‘freshly baked clothes’, which survive fashion trends for less than a month or two. Zara concentrates on three areas to effectively ‘bake’ its fresh fashions: Shorter lead times (and more fashionable clothes): Shorter lead times allow Zara to ensure its stores stock clothes that customers want at that time. While many retailers try to forecast what customers might buy months in the future, Zara moves in step with its customers and offers them what they want to buy at a given point in time. Lower quantities: By reducing the quantity manufactured for a particular style, Zara not only reduces its exposure to any single product but also creates artificial scarcity. Similar to the principle that applies to all fashion items (and more specifically luxury), the lesser the availability, the more desirable an object becomes. Zara only has two time-bound sales a year rather than constant markdowns, and it discounts a very small proportion of its products. More styles: Rather than producing more quantities per style, Zara produces more styles, roughly 12,000 a year. Even if a style sells out quickly, there are new styles waiting to take up the space. This means more choices and a higher chance of getting it right with the consumer. Zara only allows its designs to remain on the shop floor for three to four weeks. This practice pushes consumers to keep visiting the brand’s stores.
Zara’s unrelenting focus on the customer is at the core of the brand’s success and the heights it has achieved today. Customer insights are the holy grail of modern business, and the more companies know about their customers, the better they can innovate and compete. But it can prove challenging to have the right insights, at the right time, and have access to them consistently over time. One of the secrets of Zara’s success is that the brand trains and empowers its store employees and managers to be particularly sensitive to customer needs and wants, and how customers enact them on the shop floors. Zara empowers its sales associates and store managers to be at the forefront of customer research – they intently listen and note down customer comments, ideas for cuts, fabrics or a new line, and keenly observe new styles that its customers are wearing that have the potential to be converted into unique Zara styles. Due to Zara’s competitive customer research capabilities, its product offerings across its stores globally reflect unique customer needs and wants in terms of physical, climate or cultural differences. It offers smaller sizes in Japan, special women’s clothes in Arab countries, and clothes of different seasonality in South America. The fact that Zara’s designers and customers are inextricably linked is a crucial part of the brand strategy. Specialist teams receive constant feedback on the decisions its customers are making at every Zara store, which continuously inspires the Zara creative team.
Super-efficient supply chain Zara’s highly responsive, vertically integrated supply chain ships new products to stores twice a week. After products are designed, they take around 10 to 15 days to reach the stores. All its clothes items are processed through the distribution center in Spain, where new items are inspected, sorted, tagged, and loaded into trucks. In most cases,
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / Case Study
clothing items are delivered to stores within 48 hours. This vertical integration allows Zara to retain control over areas like dyeing and processing and have fabric-processing capacity available on-demand to provide the correct fabrics for new styles according to customer preferences. It also eliminates the need for warehouses and helps reduce the impact of demand fluctuations. Zara produces over 450 million items and launches around 12,000 new designs annually, so the efficiency of the supply chain is critical to ensure that this constant refreshment of store level collections goes off smoothly and efficiently. In addition to these supply chain efficiencies, Zara can also modify existing items in as little as two weeks. Shortening the product life cycle means greater success in meeting consumer preferences. If a design does not sell well within a week, it is withdrawn from shops, further orders are cancelled and a new design is pursued.
Brand communication strategy Zara has used almost a zero advertising and endorsement policy throughout its entire existence, preferring to invest a percentage of its revenues in opening new stores instead. It spends a meagre 0.3 per cent of sales on advertising compared to an average of 3.5 per cent by competitors. The brand’s founder Amancio has never spoken to the media nor has in any way advertised Zara. This is indeed the mark of a truly successful brand where customers appreciate and desire the brand, which is over and above product level benefits but strongly driven by the brand experience. Instead of advertising, Zara uses its store location and store displays as key elements of its marketing strategy. By choosing to be in the most prominent locations in a city, Zara ensures very high customer traffic for its stores. Its window displays, which showcase
the most outstanding pieces in the collection, are also a powerful communication tool designed by a specialised team. A lot of time and effort is spent designing the window displays to be artistic and attention grabbing. According to Zara’s philosophy of fast fashion, the window displays are constantly changed. This strategy goes down to how the employees dress as well – all Zara employees are required to wear Zara clothes while working in the stores, but these ‘uniforms’ vary across different Zara stores to reflect socio-economic differences in the regions they were located.
Rising up to the challenges For Zara to effectively compete and maintain its strategic advantage, the focus needs to shift away from price but towards quality. Even today the Zara brand enjoys high levels of appeal, which is evident by the serpentine queues outside its stores when it launches in new markets. There is a need for Zara to start investing in building a strong brand positioning and aggressively communicate it. Additionally, Zara needs to adopt, imbibe and leverage social media and digital platforms in its advertising and communication strategies deeper going forward. Without advertisements, Zara relies heavily on word of mouth or social media. This causes the perception of potential customers towards Zara to be heavily shaped by family and friends, which may not be accurate. In addition, Zara’s social media platforms such as Facebook and YouTube exist merely as a feed for updates rather than a platform that consumers can interact with. Its videos on YouTube are also seeing very low viewership in comparison with its follower count, which is not ideal as videos are a powerful medium for brands in the fashion industry. This is a gap that Zara needs to plug immediately as the reach and impact of social media marketing gets stronger. As Zara’s target customer segments start using more social and digital platforms for communication and for sharing their lives, it is important for Zara to have a strong presence on such platforms. n Source: Martin Roll Company
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AppArel / Retail
Gap Inc faces challenging times ahead
F
ollowing a strong industry retail report of growth of 6.6 per cent and 6.4 per cent in June and July versus the previous year, and stellar results posted other leading like Urban Outfitters, much was expected from the company Gap Inc. However, the performance of the brand Gap left much to be desired. Gap Inc’s comparable sales increased only 2 per cent as against the expected 1.5 per cent, while comparable sales of the Gap as a brand fell 5 per cent against the expected decline of 2.3 per cent. However, the growth of company was led by Old Navy, followed by Banana Republic as these brands performed in-line with estimates. As per analysis of Forbes, the following factors may influence the brand’s future performance:
Accelerating store openings Gap has speeded up Old Navy store openings. The brand opened over 30 stores in FY 2017, and 28 in H1 2018, along with 85 remodels. The performance of these stores is exceeding expectations and remodels are outperforming the fleet by an average spread of five comp points. The company further plans to double store openings as compared to FY 2017, which should help increase revenues.
Introduction of plus collection Old Navy will launch its plus collection, which was previously available only online, in 75 select stores. The women’s plussize market is growing at a higher rate than the overall apparel market. According to NPD, even with just the online business, Old Navy falls within the top 10 women’s plus-size brands and the expansion of the category in the stores represents a significant growth opportunity.
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Focus on Athleta and Old Navy Sales in the activewear category increased 2 per cent, valuing the market at roughly $48 billion in 2017. The brand registered a double-digit growth in its second quarter and the momentum is expected to continue through FY 2018. The company expects its future store openings to be focused on Athleta and Old Navy, with closures weighted toward Gap and the Banana Republic.
Excess inventory impacts margins The company was saddled with excess inventory in the first quarter, which consequently impacted its sales from this brand as well as its ability to optimise its margins. The overall gross margins of the company fell by 10 basis points in the quarter, after a 20 basis point decline in Q1. Looking ahead, the company has cut 30 per cent styles heading into the second half of the financial year, which should help to improve the performance.
Improvement in online business The company has one online platform for all its brands, ensuring customers can purchase items for in one place. This also ensures recognition for its new brands which would not have been possible if they had had a separate web presence. An upshot of this is that the company was able to deliver strong growth from its online and mobile channels in the second quarter, and is on track to garner over $3.5 billion in digital sales this year. Gap Inc. is increasing store count of Athleta, Old Navy, and the factory and outlets at the Banana Republic and Gap. Consequently, in the first half, the company opened 60 stores, largely Old Navy and Athleta, and closed 38 stores, primarily Gap and Banana Republic. n
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Indian apparel market to reach $155 billion by 2022
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he Indian apparel market is slated to grow at the rate of 15 per cent CAGR till 2022. Purchases of seven out of 10 fashion accessories in India during this period will be executed through mobile phones. Nearly half of these mobile-executed purchases will be driven by Facebook, amounting to a 110 billion dollar sales opportunity. Additionally, the mobile will influence two in three apparel purchases, amounting to a 66 billion dollar opportunity for brands, half of which will be driven by Facebook. Friction accounts for 19 per cent of consumer dropouts in the apparel category, while in the accessories category, it accounts for 22 per cent of consumer dropouts. Friction occurs when consumers dropout during purchase due to unnecessary additional effort, incremental step or inconvenience Top friction areas for different demographic cohorts vary, therefore marketers need to customise their marketing strategies
accordingly. For example, men and women display different drivers for entering the purchase funnel. Fashion brands need to adopt relevant marketing strategies and reduce friction in
consumer journeys across multiple touch-points, leading to improved conversion rates and increased revenue opportunity. The fashion spectrum in India has evolved considerably enabling the apparel and accessory market to reach $155 billion by the year 2022. n
India likely to overtake China in textiles business
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wing to the availability of cheap labor and modernisation, India is likely to outpace the Chinese textile sector. The country can easily counter Chinese competition with the aid of cheap and skilled labor. India, with the help of FDI, aims to double its annual revenue from textiles by 2025. This will also create millions of jobs in the sector. Hightech machines, which deliver quality goods, will enable India to reach the set targets at the production level. Tamil Nadu, which has 4.13 lakh handlooms, alone accounts for 39 per cent of the total textile production in the country. These provide employment to around 6.08 lakh weavers in the state. The state also has 3.66 lakh power looms and 1,889 spinning mills that provide employment to another 2.40 lakh people, while knitwear and woven garment production units provide employment to over five lakh people. The textile sector in India is showing signs of recovery. The stressed advance ratio of the textile sub-sector has improved in March 2018 from the levels of September 2017. The sector was heavily
hit by demonetisation, GST, rupee appreciation and high domestic cotton prices. Packages and incentives are expected to create a strong turnaround in the textile and clothing sector.
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India to change the rules of origin clauses in FTAs
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ndia is planning to change the clauses for the rules of origin in the free trade pacts, including the South Asian Free Trade Agreement, as the country fears that with the US-China trade war escalating, Beijing may divert its manufactured goods into the Asian markets. India’s trade deficit with China has already increased to $62.9 bn in 2017-18 out of a bilateral trade worth $89.6bn in the last fiscal. The country does not have any free trade pact (FTA) with India. However, policy makers feel that Beijing may use other countries in South East Asia and South Asia, such as
Recovery in sight for Indian textile industry
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he textile sector in India, hit by demonitisation, GST, rupee appreciation and high cotton prices, is showing signs of recovery. The stressed advance ratio of the textile sub-sector has improved in March 2018 from the levels of September 2017. Support in the form of the Rs 1300-crore ($US 185.41 million) Samarth scheme for skilling and the Rs. 6000-crore($US 855.86 million) package for apparel and made-ups, along with various incentives, is expected to create a strong turnaround in the textile and clothing sector and put the industry back on the growth path. What the industry now needs is policy support to stop excess imports and refund of all duties and taxes on exports across the value chain. In the financial year 2018, imports of textiles and apparel were 16 per cent higher than the previous year’s value. All categories across the value chain have seen a drastic rise in imports. Moreover, embedded duties, in the range of 4 per cent to 6 per cent across the value chain, are not getting refunded. This is one of the key factors for the decline in exports; apart from blockage of funds due to delay in GST refunds and rupee appreciation. n
Bangladesh, with which India has FTAs. As India has not imposed any sourcing restrictions on less developed countries (LDCs), analysts believe China can use the LDC route. Besides Bangladesh, within Asia, Nepal, Afghanistan, Myanmar, Maldives and Cambodia are LDCs. The country has increased its basic customs duty on printed circuit boards, including populated, stuffed and loaded PCBs, as well as camera modules and connectors used in mobile phones to 10 per cent from zero, seen as part of a bid to kick-start the much hyped “Make in India” campaign. n
India: Rising yarn prices worry hosiery makers
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osiery manufacturers in Mumbai are protesting against the rising prices of yarn. Yarn rates, which were around Rs 255 till January, have reached Rs 400 per kg. The prices have almost doubled during these six months. Due to this many manufacturers are losing orders. Dealers are also urging the government
to deal with the issue of cartelisation in yarn industry. Many hosiery manufacturers have protested against this “cartel” of yarn dealers and owners. Under the banner of For Arm Welfare Organisation, they burnt the effigy of yarn dealers/ owners of yarn manufacturers. They are now trying to meet Member of Parliament Ravneet Singh Bittu on this issue. n
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Market Focus
UK to remain a lucrative market for Indian apparels against all odds UK has always been a key textile and apparel market for India. However, with Brexti, the actual effects on the apparel industry will only be clear once the terms of trade are negotiated. Indeed, Brexit is expected to impact India’s exports in some ways. Stakeholders are still waiting for the clear picture to emerge.
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he UK and India have more than 200 years of shared history with powerful democracies, connected cultural institutions and a strong economic trade relationship. The Indian Diaspora, which totals about 1.5 million people, is the largest ethnic minority group in the UK, has an important role to play in many spheres ranging from economic and business relations to sports, science and politics.
India’s apparel exports to the UK remains steady For India, the UK is a key market for textile and apparel products. Out of India’s total textile and apparel exports to the EU, the UK’s share was 23 per cent in 2016. India is the fourth largest supplier of textile and apparel products to the UK. Apparel is the largest category with a share of 75 per cent in India’s textile and apparel exports to the UK. This is followed by cotton textiles and manmade textiles having shares of 12 per cent and five per cent.
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As a trendsetter in global fashion, the apparel and footwear market in the UK has been growing steadily over the last seven years, with 2018 expected to bring the current market value to a massive €60.7 billion. Besides market value, the annual expenditure on clothing which is based on sales volume has also seen a gradual increase, reaching £57.8 billion in 2017. As prevalent in all markets around the world, the maximum sales come from women’s outerwear which is almost double of men’s outerwear purchasing. Many leading brands are doing well in the UK market, including high street retailers, which include brands such as Primark, Next, New Look as well as online shops, like ASOS. In recent years, growth in internet sales has been considerably high, with 56 per cent of individuals purchasing clothing online in 2017. Despite this growing trend, many consumers still prefer to buy clothes in physical shops and offline purchases are predicted to remain responsible for around 71.2 per cent of sales by 2020. Many high street brands have now set up shop in Indian malls of Tier I and II cities. Many brands are importing their raw material from India or doing the finishing work on their garments by outsourcing from India, thus leading to a healthy economic relationship between the two countries. The UK is a major consumption centre of a variety of textile and apparel products from around the world. Apart from these, other varieties such as manmade textiles, cotton textiles, and carpets are also imported from other countries. China is the largest supplier, followed by Bangladesh, Turkey and India.
Brexit’s fallout on trade still undetermined Beset by a protracted economic recovery, rising cost of massive European Union (EU) bureaucracy, and migrant crisis, Britain opted to exit the EU. On June 23rd, 2016, when Britain voted to leave the European Union, the 28-nation trading bloc
and the pound plummeted to its lowest level in 31 years with $2 trillion wiped off the global stock market. Tariff-free trade in the EU, free movement of talent and skills, EU funding and investments were the lifeline of UK’s apparel industry. Actual effects of how Brexit will affect the apparel industry will only be clear after the terms of trade are negotiated. However, a soft Brexit, which is a sigh of
India’s exports to the UK account for less than 7 per cent of total textiles but more than 10 per cent in case of apparels. In 2015, exports to UK aggregated $2.41 billion including $1.81 billion of apparels alone. This shows trade between India and UK becomes pertinent for apparel. Although it is a large market for India, it is more or less saturated now with so many players. Post Brexit, it is expected to be a growing market for high value-added products over the next few years. Many large Indian mills such as Arvind Mills, D’Décor, Oswal, Mafatlal and Raymond and other premium producers have been exporting to UK labels
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relief for the apparel industry, is expected. Before its exit, Britain had a trade agreement with the EU but now, all trade between Britain and EU would be as per the WTO rules. This means, trade between Britain and EU will be subject to trade tariffs on imports and exports, the textile goods tariff being around 12 per cent. It is mainly the UK-based garment companies that will suffer by these tariffs and their only way out is to pass on the extra cost to customers. This will further impact retail as a whole and further impact the companies doing business with British apparel firms globally. There may be chances of a negotiable free-trade deal as well, similar to Norway (EFTA) and other new regulations. Britain will be able to increase its exports to India by more than £2 billion per year after Brexit by cutting EU red tape. The UK currently faces significant tariffs
on its trade with India because of the EU’s failure to agree to a free trade deal. However, the deal has been held up for a decade by EU regulations on intellectual property and data protection, with which India is refusing to comply. But after Britain leaves the EU, the deal can go ahead because British trade negotiators regard the disputed EU rules as unnecessary. A Commonwealth report, whose 52 member nations also include India and the UK, says Brexit will bring forth a great opportunity for bilateral relationship when actually implemented.
UK’s apparel manufacturing market holds steady Inspite of market fluctuations and changes in regulations, apparel manufacturing market has been holding steady in the UK. There has been an increase in the number of companies over the last five years and a rise in the value of clothing exports, which was worth approximately £6 billion in 2017. Growth in the apparel market has also been supported by the rise of niche markets, such as plus size clothing, which garnered £18.7 million in 2016 alone. Plus size clothing in many styles and brands has lately taken over the women’s apparel market by storm. There will be initial turmoil post Brexit as there will be some structural market changes and fresh negotiations. In perspective, EU imported textiles worth $235 billion in 2015 from the world. Of this, UK accounted for 15 per cent or $35 billion. Thus, the country is one of the largest markets for textiles including fibres, yarns, fabrics, apparels and other textile products. However, it is not a major supplier of this industry
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and thus will have negligible impact on sourcing. India’s exports to the UK account for less than 7 per cent of total textiles but more than 10 per cent in case of apparels. In 2015, exports to UK aggregated $2.41 billion including $1.81 billion of apparels alone. This shows trade between India and UK becomes pertinent for apparel. Although it is a large market for India, it is more or less saturated now with so many players.
a FTA with the EU and preferring a separate economic pact with the UK. India currently enjoys a 12.5 per cent tariff preference in the EU under its generalised scheme of preferences programme. However, the initial hurdle is the UK will firstly have to negotiate terms and conditions of trade with many different countries, besides India. So India will have to prove itself to be the best viable option and this will involve many complex and market interdependent variables. What to export/import in what quantity and what pricing between will be a different ball game altogether post Brexit.
Change is inevitable
Post Brexit, it is expected to be a growing market for high valueadded products over the next few years. Many large Indian mills such as Arvind Mills, D’décor, Oswal, Mafatlal and Raymond and other premium producers have been exporting to UK labels. Indian garment exporters however are now a little perturbed about how the post Brexit economic relationship will work out. After separation from EU, they are looking at a trade treaty with a free trade agreement (FTA) with the UK which will help boost garment exports. Knitwear exporters are also pitching for
A recent report on India’s trade relations with the UK says the value of India’s exports to the EU in FY16 stood at $45 billion, which is around 17 per cent of its total merchandise exports in dollar terms. Of that, Britain alone accounted for over 20 per cent, equivalent to $9 billion. Of this, around $2.5 billion or 28 per cent was apparels and made ups. Overall, Britain accounted for 40 per cent of India’s total merchandise exports to the EU. The impact on India’s exports is expected to happen in some ways. There will soon be an inevitable decline in demand for India’s goods and services because of Brexit-induced growth slowdown in the UK and EU, and also some un-favorable exchange rate movements. Brexit will have direct and indirect impact
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on growth prospects of both Britain and the EU. As per IMF, Brexit will mop up anything between 1 to 9 per cent of Britain’s GDP growth rate, depending upon actual terms of withdrawal from the EU. If Britain fails to retain duty-free market access, rise in EU tariff and non-tariff trade barriers will disrupt existing supply chains. That, along with slowing GDP growth, will reduce the demand for India’s exports to the region. Brexit will come at a time when emerging economies are struggling to export to the rest of the world. Industry experts feel that it will make India’s exports revival quite difficult unless it’s a soft Brexit. Value for money is the biggest purchase motivator for clothing, especially among mature shoppers. This is followed closely by quality and then price. Across all socio economic groups, value for money and quality were the top two drivers, ensuring it is not low prices alone that will garner sales as shoppers look to justify purchases at a time when their
discretionary spending is limited. Young clothing shoppers have higher purchase frequency, with 58.1 per cent of 16-24s buying clothing at least once a month, boosted by fast fashion trends and shoppers’ desire for newness. In comparison, just 14.6 per cent of 65 plus age group, buy clothing at least once a month. Experts feel the future of IndiaUK relations is bright and India can play an important role once Britain exits the EU. However, Indian exports could face increased competition from cheaper Chinese products—from steel to textiles— not only in European markets but also in third country export markets such as the US, because of relative weakness of the yuan vis-a-vis rupee against the dollar. Brexit and the Trans-Pacific Partnership (TPP) trade deals are two big threats for the revival of India’s exports to the UK. However, an intelligent precaution over the last few years India has diversified its exports significantly away from the EU and other developed markets towards emerging markets of Asia, Africa and Latin America. This is expected to minimize the damage to current market. However, Brexit could be
problematic for sectors which are overexposed to Britain and EU, like textiles and clothing, IT and pharmaceuticals. The Japanese Yen has gained immensely against the dollar over the last few quarters and that makes its imports cheaper. India can use this limited window to push exports to Japan to make up for the likely loss from Brexit. Industry experts are now seeing a wait and watch policy till the impact of Brexit is truly felt in the Indian markets. n
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US-China trade war benefits India exports
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he trade war between the US and China has presented India with an opportunity to export more cotton, corn, almonds, wheat and sorghum to China. There are at least 100 products where India can replace US exports to China by benefiting from the higher import duty China has imposed on products originating in the US. While China has imposed 15 to 25 per cent tariff on these goods coming from the US, other countries are subject to a five to a 10 per cent duty. Moreover, India has been granted additional duty concessions under the Asia Pacific Trade Agreement, making its exports more competitive. Fresh grapes, cotton linters, fluecured tobacco, lubricants and certain chemicals, including benzene, are a few products which the US has been exporting to China. India too has been exporting these products to China but now there is scope for India to increase
exports of these products because of the tariff differential and the substantial demand in China. Corn is of specific interest to India as the country is a huge corn exporter. While American corn is subject to 25 per cent duty, APTA countries can get up to 100 per cent concessions on corn exports to China. n
Falling rupee boosts India’s exports sector
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ndian exporters are buoyant due to the falling rupee. The auto component players are especially happy with increasing flow of dollars. It has resulted in businesses, transacted in dollars (the IT, apparel, leather or textile sectors), to make a substantial gain of 7-8 per cent. Those raising funds from the Indian market can be rest assured as investments typically pour in with a one-year timeline.
Those who have just raised funds, especially in dollars or about to close a fund, are in the positive sphere. Venture capital money is drawn over time and the exchange rate matters only at the time of withdrawal. Those who have drawn down their tranche of capital in the last two to three months will gain 6 per cent -7per per cent only due to exchange rate fluctuations. The current slide augurs well for those intending to raise money from the domestic market. However, despite gains, the moot point is having a stable currency should be the way forward. n
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Tirupur knitwear exports decline by 13%
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nitwear exports from Tirupur, in the first four months of the current year, have fallen by 13 per cent. A major reason for this is GST and the consequent reduction in duty drawback and rebate of state levies. The basic customs duty has been increased from 10 to 20 per cent on specified garments. The duty hike on import of 23 knitted garment items and one knitted fabric is expected to protect the domestic textile industry. Knitwear exporters had been appealing for swift action in this regard as textile imports from countries such as China, Bangladesh, Vietnam and Cambodia have increased significantly. Exporters have urged for a restriction on import of textile products. They have prepared a white paper detailing the threat from China, with Chinese companies setting up factories in countries bordering India to take advantage
of labor, low wages and customs exemption available to these countries in EU and Canada. Under the South Asian Free Trade Area agreement, specified garment items imported into India from Bangladesh are also exempted. The Tirupur knitwear cluster is looking forward to the IndoPacific economic corridor as it would open up traditional apparel markets abroad. The corridor is a treaty of 12 countries, including India, the US, Australia, Indonesia, Japan and New Zealand among others. n
India to double exports by 2025
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ndia plans to double its exports by 2025. These exports will not only create jobs but also bring in foreign exchange and validate India’s international competitiveness in view of the challenges like uncertainty of global trade, rigid approach of banks which affects availability of credit, high logistics cost and productivity standards and qualities. India will focus on 12 identified sectors for promoting their development, and realising their potential. It is preparing a special strategy for the services sector to achieve broad-based growth instead of the existing pre-dominance of IT. New structures, policies and action plans will be formulated for the sector. Attention will also be given to gems and jewelry, leather, textile and apparel, engineering sector, electronics, chemicals and petrochemicals, pharma, agri and allied products and marine products. Apart from traditional markets, the
country will boost trade with smaller countries and explore new territories like Africa, which has 54 countries but accounts for only 8 per cent of exports from India. India has acceded to the WTO’s Trade Facilitation Agreement. An action plan containing specific activities to further ease bottlenecks to trade has been prepared. n
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India’s apparel exports to grow by 1-2 % y-o-y for FY19
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he ICRA analysis predicts India’s apparel exports to grow at a modest pace of 1-2 per cent year-on-year for the rest of FY19 vis-a-vis a sharp degrowth of 14 per cent y-o-y in 4M FY19. This denotes a 4 per cent y-o-y decline in the country’s apparel exports in FY19, the fourth consecutive weak year for India’s apparel exports, following the 4 per cent degrowth in FY18 and modest growth rates of 1 per cent and 3 per cent in FY16 and FY17, respectively. India’s apparel exports have exhibited an discouraging trend, with a marginal de-growth of 1 per cent in FY18 as well as 4M FY19, even after adjusting for apparel exports to the UAE, which have declined inexplicably and sharply over the past one year. Growth of apparel sector in India is being constrained by the
Bangladesh, Sri Lanka to jointly make eco-friendly jute apparel
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MG manufacturers from Bangladesh and Sri Lanka are teaming up to develop eco-friendly jute-based garments with help from a design school. This has reportedly been initiated by Mahesh Amalean of MAS’ and Ashroff Omar of Brandix’s, the two largest apparel exporting companies in Sri Lanka with operations in India, Bangladesh, Vietnam and the USA. This collaboration between industry leaders of the Sri Lankan and Bangladeshi apparel sectors is a positive sign on increasing trade between them. It would undoubtedly result in an expansion in Sri Lanka’s apparel sector into other markets of South Asia. Foreign companies interested in doing business in Sri Lanka will now be able to explore opportunities in the country’s apparel sector and also set up base to venture into the Bangladeshi apparel sector. n
challenging of the export subsidy schemes by the US at the World Trade Organisation. n
Kerala’s weavers need six months to repair looms
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erala weavers will need at least Rs 40,000 and five to six months to repair their looms. This will render them jobless as they won’t have any work till the looms are repaired. There are more than 200 weavers in the Paravoor and Chendamangalam regions who work at home and provide the finished products at the various handloom weavers cooperative societies. Yarn, thread and dye solutions are provided by these societies. There are five such societies functioning in Paravoor. The loss for five societies would amount to approximately Rs 15 crores. Each society has its own handloom manufacturing units. Of the five, the worstaffected was the Chendamangalam Handloom Weavers’ Cooperative Society. The entire manufacturing unit was submerged during the floods, damaging 45 looms. n
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Indian garment
manufacturers need to speed up to grab global business
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s India aims for 20 per cent yearly growth in exports over the next decade, Indian manufacturers need to develop a business strategy that can help the country to succeed in the US and European markets. In 2025, global trade in the textile and apparel market will cross $1.2 trillion. China has nearly 40 per cent share in global exports. However, in the past few years, the country is experiencing a downward trend in apparel exports and has vacated nearly $30 billion worth of space in global trade. Growth in global trade and China’s shrinking exports share present a
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lucrative opportunity for other countries with competitive manufacturing facilities. India can become one of the biggest gainers in the changing landscape of global apparel trade. Drip Capital offers insights into some of the intriguing aspects that can make India a global textile destination.
The prerequisites Today, fair trade has become a prerequisite to sustain globally. Fair trade advocates expect that everyone in the value should earn enough to fulfill basic household needs, regardless of volatile market prices. Environment sustainability is also a
big concern and consumers in the West want products that are made judiciously. Indian manufacturers can stand out by positioning themselves as practitioners of Fairtrade. Environmental stewardship and labourfriendly working conditions can become India’s USP. If India is to achieve close to 20 per cent yearly growth in apparel exports, manufacturers have to invest in skills training and process improvement to match global competitiveness. In recent times, there has been increased focus on skill development but these initiatives need to scale up. If the Indian garment industry remains at same productivity levels, they would need 35 million more workers to fulfill the new demand, which is nearly impossible. The objective should be to match the productivity levels of China in a few years, average output per hour and per machine output both in terms of quality and quantity. Indian policies make it difficult to import the fabric needed to produce winter or some specific garments. Locally, the textile industry is focused on cotton which leaves the exporters with no material to produce such products. This policy to protect the demand for local cotton producers is perhaps doing more than good. n
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NAFTA 2.0 to change US apparel sourcing norms
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hough, the full details of the renegotiated free-trade deal between the United States and Mexico haven’t been revealed yet, and not likely to be known for another month at least, what is known is that the US government wants to source accessories such as sewing thread, pocketing fabric, narrow elastic bands and coated fabric from the freetrade region to qualify for duty-free benefits. Under previous NAFTA deal, those raw materials could be sourced from any region in the world.
The importance of TPL The US demand raises one big question of whether trade-preference levels (TPL)
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Tom Gould, Senior Director, Customs and International Trade, Sandler, Travis & Rosenberg, has revealed his customers who produce in Mexico plan to use the TPLs as long as possible until the specifics of a new trade deal are implemented. And if they can’t use those TPLs, they would not hesitate to use regionally produced fabrics or move their production to other countries to keep their costs low.
Changing scenario under NAFTA 2.0 Apparel companies in Los Angeles that produce 100 percent in Mexico should be concerned about changes under NAFTA 2.0. For years, sewing thread and pocket linings under the Dominican Republic–Central America Free Trade Agreement would be sourced from regional sources, but that would no longer be the case under NAFTA. Les Miller, the Chief Executive Officer at American & Efird, feels most Mexican apparel factories currently use regional sewing thread as it streamlines the production process. It also makes the import-export process easier and more efficient as they don’t have to explain where their non-regional sewing thread came from. In the past, apparel factories would often use fabric scraps leftover from production to make pocket linings. With the new arrangement, apparel manufacturers will have to verify those scraps come from regionally made fabric instead of Asian or Central American fabrics.
The Canadian involvement
could be altered, allowing for some non-regional yarns and fabric to be used even though garments were produced within the free-trade area; thus enabling them to receive duty-free status. US representatives, in their previous trade negotiations, had proposed eliminating TPLs. The fact sheet of the US Trade Representative also stated the Trump administration wants to limit the use of non-NAFTA inputs in the textile and apparel trade.
Although President Trump has threatened to exclude Canada from the pact if it doesn’t agree to some of the United States’ demands, trade groups across the US want Canada to be a part of it to make it a trilateral agreement. The US-Mexico Trade Agreement submitted to the US Congress would give them 90 days of time to examine the agreement. Once these reviews are conducted, businesses and the public will have a better perspective on the contents of the free-trade agreement. n
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India and Singapore review FTA
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he Indian decision to introduce rules of origin to protect its garment manufacturers is likely to adversely affect Bangladesh’s exports to India. However, it is difficult for India to impose any condition on duty-free facility as Bangladesh enjoys this trade benefit under the South Asian Free Trade Agreement. Although India doubled import tax on more than 300 textile products to reduce its cheap imports from China, due to the dutyfree facility offered by India to Bangladesh, China is exporting textiles to India through Bangladesh. The industry had asked for rules of origin for duty-free imports. Competition from China is forcing some Indian businesses, such as polyester
US urge India to rethink trade barriers and tariffs
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S Ambassador Kenneth Juster urged India to rethink over its trade barriers, tariffs and regulations. He emphasised on the need for India and the US to see trade relations as an important strategic element of their ties. He particularly emphasised on the barriers in the technology industry, including a Reserve Bank of India (RBI) order directing technology companies to base all their servers in India. Juster warned that the issue had become one of a growing economic differences between New Delhi and Washington over the past few months. India agreed this month to defer its retaliatory tariffs worth $235 million on 29 American products till late September. This was in response to the U.S. raising tariffs on steel by 25 per cent and aluminum products by 10 per cent, which India has failed to get a waiver on. The US also plans to cancel India’s Generalised Systems of Preferences (GSP) status over the tariffs issue. n
production facilities, to run idle, leading to job losses. India is considering a fabric forward policy, where duty-free access to garments would be provided if the fabric is sourced from India. Bangladesh has warned that if India imposes conditions on duty-free market access on its products, it would retaliate with similar restrictions on Indian products in Bangladesh. India’s total textile imports increased by 16 per cent in fiscal year upto March 2018. Of this, about $3 billion were from China. Duty-free fabric from China comes to Bangladesh, gets converted and lands in India at zero duty. n
Trump threatens to withdraw from the WTO
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resident Donald Trump has threatened to withdraw from the World Trade Organisation (WTO), claiming that it treats his country unfairly. According to Trump, the body too often rules against the US, although it has also, in recent judgments, ruled in its favor. Although the WTO was set up to benefit everybody, the US seems to lose almost all lawsuits filed in the organisation. However, analysis shows the US wins about 90 percent when it is the complainant and loses about the same percentage when it is complained against. Washington recently blocked the appointment of new judges to the WTO’s Geneva-based dispute settlement body, which could pot0entially paralyse its ability to issue judgments. US Trade Representative Robert Lighthizer has also accused the WTO of interfering with US sovereignty. The US president has been protesting against unfair trade since even before he became president. He even termed the agreement as the “single worst trade deal ever made.” The country has been embroiled in a dispute over trade with many countries. The most recent one being its battle on trade tariffs with China. n
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AppArel / Trade Treaties
Indian trade barrier to hurt Bangladesh exports
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he Indian decision to introduce rules of origin to protect its garment manufacturers is likely to adversely affect Bangladesh’s exports to India. However, it is difficult for India to impose any condition on duty-free facility as Bangladesh enjoys this trade benefit under the South Asian Free Trade Agreement. Although India doubled import tax on more than 300 textile products to reduce its cheap imports from China, due to the duty-free facility offered by India to Bangladesh, China is exporting textiles to India through Bangladesh. The industry had asked for rules of origin for dutyfree imports.
US-China trade war heats up with more tariffs on Chinese goods
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S multinationals are gearing up for an all-out trade war between their country and China.Within weeks, the US may impose tariffs on more than half of all Chinese exports to the US. In response China is contemplating hitting back at more than 80 per cent of US exports to China. Tariff not only increases tax consumers but also disrupt the supply chain for brands. Top brands depend a lot on a stable global supply chain. Around 1,000 types of Chinese products in the textile and apparel category are subject to tariffs imposed by the US. Many US companies operating in China feel the threat of tariffs can be useful. The US and Chinese trade negotiators have finally begun to talk about critical issues that had been ignored for years, such as China’s industrial policies and mandatory joint venture structures that facilitate technology transfer to Chinese companies. Multinational corporations have been growing frustrated with the many hurdles they face in China, from market access restrictions to an opaque regulatory environment. Some of these issues have been repeated year after year — some of them have been issues for 30 years. n
Competition from China is forcing some Indian businesses, such as polyester production facilities, to run idle, leading to job losses. India is considering a fabric forward policy, where dutyfree access to garments would be provided if the fabric is sourced from India. Bangladesh has warned that if India imposes conditions on duty-free market access on its products, it would retaliate with similar restrictions on Indian products in Bangladesh. India’s total textile imports increased by 16 per cent in fiscal year upto March 2018. Of this, about $3 billion were from China. Duty-free fabric from China comes to Bangladesh, gets converted and lands in India at zero duty. n
India proposes stricter rules to prevent Chinese goods flooding the country
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n the Regional Comprehensive Economic Partnership (RCEP) trade agreement India proposed stricter rules of origin to prevent Chinese goods from indirectly flooding the country. These rules determine the source country of a product, based on which they get tariff concessions or are subjected to duties. According to India, the last country from which a product is exported should do the highest value addition with the help of indigenous inputs. The need for strict rules of origin comes in the wake of India having a trade deficit with as many as 10 member countries of the RCEP, including China, South Korea and Australia and which has increased in 2017-18 with seven countries. RCEP negotiations were launched in November 2012 and the first round of negotiations was held in 2013. However, trade experts view that stricter rules of origin with China may not benefit as Beijing circumvents its exports through India’s other neighbours. n
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AppArel / Trade War
US-China tariff war sees newer sourcing destinations emerging strong
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he escalating US-China trade war is driving many Chinabased manufacturers and their US clients out of China to other low-cost countries like Vietnam, Cambodia, etc, leather brand Steve Madden is shifting handbag production to Cambodia, Techtronic Industries is moving out to Vietnam while Flex is planning to shift production centres from Mexico to Malaysia. The US has so far levied 25 per cent tariff on $50 billion Chinese industrial goods and is planning to levy tariffs on another $200 billion Chinese exports. It has excluded most
consumer goods from the tariff lists, yet many manufacturing and retail executives fear the range of affected products could widen with both Beijing and Washington refusing to concede.
Emergence of new lucrative markets The manufacturing industry needs to come up with strategies to diversify this risk. Factory owners in China are already shifting production to other developing countries such as Bangladesh, Cambodia and Vietnam over the past decade in search of cheaper wages and a hedge against the political and economic risk that comes from reliance on one country. The trade war will further intensify this shift. Vietnam has been at the centre of many companies’ ‘China plus’ manufacturing strategies in recent years, attracting
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country still accounted for 35 per cent of global clothing exports last year, compared with just 6.5 per cent from Bangladesh, 5.9 per cent from Vietnam and 1.6 per cent from Cambodia. It is in a similar position for office and telecoms equipment.
Retailers to bear the brunt
investments from the companies like Samsung, the South Korean electronics group, Daikin, the Japanese air conditioning group, and Techtronic. Many US and European apparel fashion brands have shifted their production to Vietnam with a just few spare facilities left in China.
China retains its dominant position Though tariffs and the uncertain future of US-China relations have unnerved many manufacturers, China is still likely to retain its dominant position. According to WTO, the
Although the onus of paying tariffs will officially fall on the US importers of the affected products, the entire supply chain from consumers to the Chinese factories are likely to be affected. According to Panjiva, a research unit of the credit rating agency S&P, of the 200 US companies that are depending on these tariffs for their main earnings, only 47 per cent plan to raise prices for consumers. Also the percentage by which these prices are likely to rise is comparatively lesser as tariffs are charged on wholesale import prices, before retail mark-ups. As Edward Rosenfield, CEO, Steven Madden notes retail prices would need to rise by only 3.5 per cent to offset a 10 per cent tariff. But retailers are unlikely to pass on this cost to consumers; affecting their own profit margins in the bargain. n
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AppArel / Imports
India’s apparel exports to Italy still minimal
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lthough apparel is the largest category with a share of 46 per cent in India’s textile and apparel exports to Italy, its share is still miniscule as compared to that of the other countries. The top 10 suppliers account for 71 per cent of textile and apparel imports by Italy. China and Hong Kong are the largest suppliers accounting for 21 per cent share, followed by Germany with 8 per cent and Spain and France 7 per cent each. Apparel is the largest imported category by Italy, making up 61 per cent of total textile and apparel imports. This is followed by manmade textiles with a share of 17 per cent. In recent years, China, the largest supplier for Italy, has seen a sustained rise in its wages,
UAE’s apparel imports from India fall by 59 per cent
opening up opportunities for India to increase its share in Italy’s apparel imports. Apart from this, manmade textiles category offers huge potential for India to increase its market share in Italy. It can increase its export competitiveness by investing in manmade fiber-based textile manufacturing processes, thereby increasing its market base. n
Trouser imports of EU increase by 7%
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ndian apparel imports from UAE declined drastically by 59.26 per cent during the first half of 2018. India’s share dwindled both in knits and woven categories significantly. Knitted apparels export witnessed a massive fall of 60.73 per cent while woven garments declined by 57.36 per cent. These falling exports can be attributed to many reasons. First and foremost.UAE’s overall textile and apparel imports have been declining for three years. The 5 per cent VAT as well as an increase in fuel and electricity prices following the crash of oil prices in the international market have also impacted country negatively. The ongoing recession in the UAE is hurting consumer spending badly. Changing consumer shopping pattern is impacting retail business, pushing buyers to cut import orders. n
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he European Union’s trouser imports increased by 7.82 per cent in volume during the first five months of 2018. Their value, however, declined by 1.16 per cent. This was possibly due to low unit prices offered by all top exporting hubs such as China, Bangladesh, India and Vietnam. The import value of trousers from China declined by 7.64 per cent, while that from Bangladesh fell by 0.09 per cent. Trousers exports from Vietnam, till May this year, grew by 5.09 per cent however; those from India fell by 5.60 per cent. The rise of Bangladesh and Vietnam indicates the preference of the European buyers for products from these countries. India, however, was not able to grab the shifting orders from China. It s inability to take advantage of the rupee depreciation of around 6 per cent against the euro has hurt its exports. Further, the absence of a free trade agreement with the EU made products manufactured in India non-competitive as compared to countries like Bangladesh which get trade benefits by the EU. n
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AppArel / Imports
US jeans imports increase in H1
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ccording to the data from the Office of Textiles and Apparel, OTEXA, overall denim jeans imports of USA increased by 9.2 per cent to reach $1.66 billion in value for the first six months of 2018. The countries from where US sourced its jeans include Vietnam, China, Mexico, Bangladesh, Cambodia and several Central American countries. China shipped the most jeans in the women’s and girls’ categories, increasing 2.88 per cent to $291.89 million, while its men’s and boy’s shipments rose by 6.35 per cent to $98.97 million. Among the Asian countries, Vietnam, Bangladesh and Cambodia were the major suppliers of jeans to the U.S. market. In the first half, Bangladesh’s shipments in the men’s and boy’s category increased by 16.88 per cent to $132.75 million, while in the women’s and
girls’ category, it rose by 16.19 per cent to $104.17 million. Vietnam’s shipments of women’s and girls’ jeans increased by 46.9 per cent to $75.43 million in the period, while men’s and boys’ rose by 33.3 per cent to $32.23 million. Imports of Cambodia’s women’s and girls’ jeans grew 32.7 per cent to $40.2 million, as the country’s shipments of men’s and boy’s product were up 35.19 per cent to $9.64 million. Pakistan’s shipments of women’s and girls’ blue jeans increased by 24.1 per cent to $61.54 million, but imports of men’s and boy’s declined by 0.47 per cent to $40.97 million. n
India imports 56% more RMG from Bangladesh during July-November 2017
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ndian imports of readymade garments from Bangladesh increased by 56 per cent during July-November 2017 over the same period previous year. Its imports of knitted apparel rose by 69 per cent, while that of women’s apparels grew by 51 per cent. Earlier, garment imports from Bangladesh attracted a countervailing duty and education cess. However, since the introduction of GST, garment import from Bangladesh is free. This unilateral duty-free market access facilitates the entry of Chinese textiles into India. Textile raw material from China comes to India via Bangladesh. Duty free fabric from China goes to Bangladesh, gets converted and lands into India at zero duty. Trade bodies, which expect textile imports from Bangladesh to increase further, want India to
introduce a rule of origin for duty free imports. Competition from China is forcing some businesses, such as polyester production facilities, to run idle, leading to job losses. Almost 50 per cent clothing accessories and apparel made in Bangladesh are made with Chinese fibers. n
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AppArel / AEPC events
Good response for the India Pavilion at ATSC
Inaugural ceremony of India Pavilion at Apparel Textile Sourcing Canada
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eld at the International Centre, Toronto, Canada from August 20-22, 2018, the Apparel Textile Sourcing Canada (ATSC), was attended for the first time by AEPC alongwith 10 booths out of the total 45 booths at India pavilion.
Good response to the India pavilion The India pavilion at ATSC was inaugurated by Dinesh Bhatia, Consul General, in the presence of Saifullah Khan, Consul (Commerce) & HOC and Kanwar Dhanjal, President, Indo- Canada Chamber of Commerce besides representatives from AEPC, FICCI, WWEPC. The pavilion received a very good response from most of the buyers. Branding helped it to give a cohesive look to its stalls. As the second largest participating country after China, the presence of India was well noted by the visitors.
Interactions with Indo-Canada chamber of commerce
Major brands visit the stalls at the fair Majority of the enquiries were for smaller orders and the tariff difference between Bangladesh and Canada was an important constraint for growth. However, major brands like LaMaison Simons, Canada, Joe Fresh, Canada, Zulily, USA, EntzianEntreprises, USA, Gilden Activewear, Canada, Ameri Pride Services, USA, Ym Inc., Canada, Go Global, Walmart, USA, etc visited the stalls and participants reported good enquiries.
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AppArel / AEPC events
India Pavilion at Apparel Textile Sourcing Canada
Sessions on Canadian apparel trade The fair had meaningful sessions on apparel trade in Canada with topics like: • The Impact of Artificial Intelligence & Digital Disruption on the Supply Chain, • Canada Trade Policy Update • United States Trade Policy Update and the Impact on NAFTA and TPP • Fireside Chat-U.S. Trade War and its Effects
on Canadian and American Retailers • Sustainable Sourcing • Brand Creation for the Next Generation • Intellectual Property Laws to Protect Against Fashion Design Piracy The Indian participants were invited by the Indo- Canadian Chamber of Commerce for a networking session, where both sides exchanged possibilities of collaboration, including a larger scale India event in Canada for promotion of the entire Textile value chain. n A glimpse of Fashion at Apparel Textile Sourcing Canada
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AppArel / Insight
Fashion adopting a functional approach
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rom buying clothes purely on fads or the desire to look good to buying clothes that complement modern lifestyles, consumers have come a long way. Changing lifestyles have pushed up demand for comfort clothing.
Comfort with style a priority Growing online shopping has increased
the contribution of online retail sales. Last year, web-based shopping platforms from Amazon to Zalora accounted for 12.1 per cent of retail sales in the Asia-Pacific region. The global e-commerce market is estimated to be worth $2.3 trillion. As online stores deliver everything from furniture to clothing to groceries, consumers today rarely step out of their house to shop. As entrepreneur.com reveals, 51 per cent of Americans and 67 per cent millennials prefer to shop online rather than visit brick and mortar stores. This is also the reason why sale of luxury loungewear has
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increased over the years. Consumers expect their clothes to be both comfortable and versatile enough to accommodate their hectic schedules without compromising on style. The rise of luxury loungewear is seen as a response to varied lifestyles of modern consumers. A striking example of this is the cashmere jogger which continued to be the best seller at Haroods – the luxury department store in 2017. On similar lines, sale of sweatpants at MatchesFashion.com increased 300 per cent year-on-year while British retailer Selfridges registered a 30 per cent yearon-year growth in sales of premium loungewear. The retailer’s
of cashmere loungewear pieces also doubled. Known for their luxurious feel, the clothes made of Tencel, Lyocell marry style and comfort. They increase a consumer’s style quotient by exhibiting a sleek, sumptuous sheen and deeper, richer color compared to other fabrics. More absorbent than cotton, softer than silk and cooler than linen, Lyocell also provides long-lasting softness to help skin stay pleasantly cool and dry through day and night.
Moving towards functional fashion With busy lifestyles, more travel and varied and flexible work lives, fashion too is adopting a functional approach. Consumers seek comfortable, fuss-free styles that adapt to the moment and can travel anywhere with them.
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Also, with consumers becoming more aware about health and wellness, they expect more from the apparel industry, just as the versatility of activewear has grown in response to demand from the athleisure fashion consumer. Shoppers don’t just buy a product, they
buy everything it represents. Still, they can feel limited by choice in a clothing industry that produces some 100 million tons of fibers each year, of which synthetics are expected to be more than 98 per cent of future fiber production, according to petrochemical analytics firm, Tecnon Orbichem. Consumers who buy eco-friendly clothes can now feel good about opting for garments made of fibres having the least environmental impact. A fiber of botanic origin, Tencel is extracted from the cellulose found in wood pulp, and its production process is more eco-friendly than other fibers in terms of water, land and chemical output. Using a special ‘closed-loop system’ recognised by the European Union with an European Award for the Environment, 99.7 percent of the chemicals and solvents used to make Tencel fibers are recovered and recycled with minimal waste and very low emissions. Leading busy and aspirational lives, consumers today yearn to make their clothes durable, comfortable, timeless and eco-friendly. Increasingly, the apparel industry is offering up sustainable options to help satisfy that demand. n
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AppArel / Trends
Companies prefer cotton over synthetic apparels
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he outdoor market, over the recent years, has being flooded with synthetic apparels that shed tiny microfibers during laundering. These tiny plastic fibers travel to waterways where they are swallowed by the fish that people eat and the tap water they drink. To tackle this, companies are making eco-friendly apparel products with natural fibers such as cotton. These promote sustainability besides reducing
the impact of the industry’s products and processes. They are also more comfortable, versatile, sustainable, breathable and reliable than synthetics like polyester and nylon. Besides cotton, materials like polyester or recycled polyester, microfiber and rayon fibers, including viscose and Tencel are being used. Consumers are seeking abrasion resistant and durability enhancement technology in their active wear. They demand active wear that is odor resistant, water repellent or has anti-microbial features, especially consumers in the age group of below 35 years. n
Denim back in fashion in the US
Nearly 24 per of US apparel sales generated by Athleisure
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ith the US retailers rebuilding their denim assortments, the category is witnessing an upswing in the country. There are currently 42 per cent more denim products in stock this year compared to the last year. The prices of denim products have increased considerably since 2014, creating a more competitive market. The average prices for men’s jeans in the US have increased by 20 per cent this quarter, while those for women’s denims have risen by 10 per cent. Of the total market for women’s jeans, skinny jeans holds the largest share of 58 per cent followed by straight leg jeans, cropped and ripped jeans. Other silhouettes that have gained popularity since 2016 include cropped, culotte, mom and wide. Wide-legged jeans have been in focus for brands like Madewell and Everlane. Finished hems, frayed hems, and black and white denim too have performed well. Similarly, flared jeans are gaining momentum with flared shaping on skinny styles being the most versatile. High-waist jeans with wider cuts also lend a hint of freshness to the fabric. Apart from jeans, denim outerwear, dresses, shirts, shorts and skirts have also grown by 12 per cent in the last month. n
ccording to the recently released report of the NPD Group titled “The Future of Apparel” report, athleisure accounts for 24 per cent of total apparel industry sales. This growth is likely to continue over the course of this, and also the next year. The report further highlights that the sale of sweatshirts increased by double digits in the twelve months ending June 2018, while the sale of active bottoms increased by 5 per cent. The report demarcates consumers into six segments, including Connected Consumers, Brand Loyals and Retail Reluctant. It found that Social Shoppers, defined as being ‘fashion and image conscious,’ and ‘comfortable shopping online’, represented the typical athleisure consumers. The study points out that athleisure, being embraced by consumers from a wide range of demographics, has become mainstream across all segments. Changing social attitudes towards casual wear and increasing health-consciousness among consumers have also contributed to active wear becoming a staple in the wardrobes of its consumers. n
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Demand for temperature sensitive clothing on the rise
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oday’s consumers are concerned about their personal comfort, and that may be part of the reason why the current population has been dubbed the indoor generation. A survey by Velux, a window manufacturing company, says on average people spend 90 per cent of their day, or about 21 hours, indoors. According to Peter Foldbjerg, Head, daylight energy and indoor climate, Velux, today’s generation is of indoor people where the only time they get daylight and fresh air midweek is on the commute to work or school. If consumers are constantly in a 70-degree environment, it makes sense for retailers and brands to offer apparel that work at that temperature. And since consumers are avoiding outdoor heat, humidity, and bugs of summer, as well as the ice, snow, and cold of
winter, it stands to reason they would want clothes that are just as comfortable indoors any time of year. Compared to manmade fiber clothing, the overwhelming majority of consumers say cotton clothing is the best for T-shirts (90 per cent), underwear and intimates (83 per cent), childrenswear (82 per cent), and casual clothing (80 per cent), according to Monitor research.
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Cotton the most favoured fiber More than 4 in 5 consumers (82 per cent) say cotton is their favorite fiber to wear, according to the Cotton Incorporated Lifestyle Monitor Survey. This is followed by a distant 3 per cent who choose polyester, silk (2 per cent), then spandex, rayon, linen, and wool (all 1 per cent). Because cotton pieces are lighter and more breathable, they can easily be layered in cooler months, or worn alone in warmer, more humid seasons. Compared to manmade fiber clothing, more than 8 in 10 consumers say cotton clothing is the most comfortable (86 per cent), according to Monitor data. This is a significant increase from February 2017 (80 per cent). In further comparisons to synthetics, consumers say cotton clothes are the most sustainable (86 per cent), the softest (83 per cent), highest quality (78 per cent), and most versatile (63 per cent). Further, the majority of consumers are bothered when brands and retailers substitute synthetic fibres in apparel items they expect to be made from cotton. For example, 61 per cent (up significantly from 53 per cent in 2017) are bothered when brands use synthetics instead of cotton in T-shirts, according to Monitor data. Consumers are also bothered when synthetics are substituted for cotton in underwear (60 per cent, up significantly from 54 per cent in 2017), denim jeans (57 per cent, up significantly from 52
per cent in 2017), casual clothes (56 per cent, up significantly from 46 per cent in 2017), activewear (50 per cent), business clothes (47 per cent), and childrenswear (45 per cent). Brands and retailers would benefit from the majority of consumers who would pay more money to keep cotton from being substituted with synthetics like polyester in everything from underwear and intimates (70 per cent) to tees (65 per cent), denim (62 per cent), businesswear (57 per cent), activewear (55 per cent), and children’s clothes (52 per cent), according to Monitor research.
Where’s the future headed The concept of clothes that easily transit from one season to the next makes sense from a consumer standpoint as well as an environmental one. For consumers, it means buying key, quality pieces that can be worn virtually year round, both because their weight isn’t too light or heavy, and their colors can be mixed with others to bring an outfit into the next season. Keeping a certain number of items in the closet as a base, means less churn and overhaul each season. Robert Babigian, key account executive – apparel, Timberland points out the company is focussing on casual, comfortable pieces heading into spring/summer 2019. The company is offering retro elements like track suits, color-blocking, and logo pieces for next season, and focusing on archival pieces heading into fall 2019. It is offering a lot of fleece and tees, mostly 100 per cent ring-spun cotton, and some cotton blends in its fleece. There is an aspect of the outdoor trend that’s more mainstream and it’s not as focussed on technical fabrics. These are pieces that can be worn anywhere and that resonate with the younger consumer. n
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AppArel / Infrastructure
Manipur upgrades three apparel making centres in Imphal
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he chief minister of Manipur recently inspected the three manufacturing units of Imphal: Apparel and Garment Making Centre, Lamboikhongnangkhong in the west district. These three units can produce large number of apparels and garments. After accessing the production unit, the state will sign an MoU with a Mauritian company
to supply about one lakh pieces of various apparels per month. The state is planning to sign a MoU with the two local private companies within a week to work together in this regard in public-private partnership model. Around 10 trainers from Delhi will train around 1,000 state youths to start large scale production of apparels. It Centre of Excellence in Coimbatore to develop standards for products Ashwin Chandra, Vice-Chairman, Southern Mills’ Association, while inaugurating a two-day
conference on Industrial Textiles - Products, Applications and Prospects�, organised by the Department of Textile Technology and Automobile Engineering of PSG College of Technology, urged Centres of Excellence for Technical Textiles in Coimbatore to develop standards for products. These centres should acquire more knowledge and become experts in their respective fields. They should also involve marketing experts, identify the demand, and work with the textile clusters. Further, at present, there is no centralised information on standards for industrial textiles. The centres should work on testing and standards. Coimbatore has two Centres of Excellence - one for medical textiles and another for industrial textiles - set up with support from the Central Government. This is the right time to tap opportunities in technical textiles as the Union Government is promoting Make in India and indigenisation. n
Kay Ventures to convert Karur into a global knitwear center
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ay Ventures has teamed up with Hydra Micro Business Solutions to convert Karur into a global knitwear center. Karur is a hub for quality made ups and home textiles in Tamil Nadu. Its export turnover is only Rs 4,000 crores a year while Tirupur has already breached the Rs 40,000 crore. A key factor behind this stark difference is the size of segments they cater to. The size of the clothing sector is many times more than the home textiles market. However, this is set to change because knitwear made an unnoticed entry into Karur sometime in 2016. Hydra is an economic framework that makes it possible for multiple entities to collaborate, think and function like a single entity
on a single platform. The Kay Ventures knitwear cluster in Karur annually produces 7.50 million pieces of knitwear, predominantly for leading domestic brands and export. Efforts are under way to increase the capacity to 20 million pieces per annum to accommodate more orders in the near term. Kay aims at expanding its knitwear capacity to 10,000 machines in the next four years. n
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YEIDA to set up textile park to boost industry growth
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he Yamuna Expressway Industrial Development Authority (YEIDA) is in the process of setting up a textile park on 200 acrenear the Jewar airport in Noida. The park will boost industry growth by creating nearly half a million employment;
Arvind to outsource textile production in the next five years
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n the next five years , all of Arvind’s textile production will be outsourced and the company will exclusively focus on garments. Garmenting will be done in phases, from 10 per cent as of now to 30 or 40 per cent. Arvind will employ at least 5,000 –8,000 women each in facilities in Jharkhand and Gujarat to produce apparel.
90 per cent of whom will be women. It will be ready in a span of three years. The Yamuna Authority issued a list of 240 units for industrial land. These industries include those for textiles, telecommunications, X-ray machines, airconditioning, copper metal parts, cotton, cycle, milk testing and its products. The Noida-Greater Noida area is a textile hub with an annual export capacity of nearly Rs 14,000 crore ($US 2 bn). The domestic readymade garment market also has an annual turnover of Rs 3,000 crore ($US 450 mn). Since land in Noida and Greater Noida is costly, the businessmen are planning to expand their business in neighbouring areas such as Jewar. n
UP launches ODOP scheme in Lucknow
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iming to promote traditional industries synonymous with various districts of the state, the UP government recently launched the “One District One Product (ODOP)” in Lucknow. The government plans to set up a raw materials hub for the apparel sector in GautamBudh Nagar under this scheme. The GautamBudh Nagar district’s garment industry has an annual turnover of Rs 14,000 crore. The district contributes 60-70 per cent UP’s garment export. The ODOP scheme will give a new impetus to the industry.Bank loans worth over Rs 10 billion were distributed to 4,095 SME entrepreneurs to expand their units. Apart from that, the President unveiled the ODOP helpline and ODOP website. The attending craftsmen were also given toolkits. n
The new facilities in Ethiopia will focus on garmenting and offer duty-free access to European markets. This value addition will help Arvind to become a one-stop shop. The company from being traditional textile manufacture, will move to being a technology company led by intellectual property rights, designs and strategic relations with customers. The ROCE is expected to grow from the current ten per cent to 18 per cent by financial year 2022-23. n APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / Tech Trends
Apparel Technology New fabric handling technologies a time saver
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o keep up with rising demand, fast fashion companies have started resorting to measures which can enhance quality control standard operating procedures. Big brands have inhouse quality control teams, whose job is to design, mandate, and audit processes for vendors to follow throughout production. One of the mandatory processes in garment manufacturing is fabric relaxation. Many fabrics, especially knits, need to be carefully handled to account for stretch that can be warped and affects the overall drape and fit of the final product. But at times, before the fabric pieces are sent through the sewing line, the fabric rolls are mishandled during spreading. Ram Sareen, Head Coach and founder, Tukatech, stated typical ‘relaxation’ necessitates that a factory takes a perfectly
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AppArel / Tech Trends
and changing these fixed processes becomes very difficult.
Fabric handling
rolled fabric, open it onto a table, and leave it there for a day or two to settle. In this process, not only is the integrity of fabric harmed due to the handling and friction, but also one to two days are lost in the production cycle. It is often seen that about 8-10 workers handle fabric spreading, which increases manual dependency. When it is time for production spreading, that fabric is usually handled by at least eight, and sometimes by as many as fourteen or fifteen people, who catch and pull the fabric out of proportion as they lay it down. This creates uneven stretch about the fabric, and completely negates any relaxation that might have happened while the fabric was lying in a pile the day before. Factories are following the procedures as they are given, but sometimes these practices diminish the very quality they are seeking. The same practices are often applied uniformly across all types of fabric, even if the necessity is not there. For example, fabric handling procedures for knit fabrics may be applied to denim, simply because it is a ‘stretch’ denim. Sareen highlighted that the stretch for denim is only in the width. You can relax the denim for ten years and it is never going to come back in length. These procedures become ingrained in local production culture,
Labour in the some countries is cheap, but labour accounts for less than 20 per cent of the total production cost. The cost of fabric, on the other hand, equates to 60-75 per cent of the garment cost. It is in the best interest of both brands and vendors to focus on handling fabric carefully, so that the human and material resources are not wasted, and the number of steps and time for manufacturing are reduced. Simplifying the fabric spreading process means reduction in the cost of labour, better product quality, and a shorter lead time. When fabric spreading is done automatically with a machine or on a mechanised trolley system the capacity increases. Automatic fabric spreading ensures that every inch of fabric is aligned and gently handled from the time the roll is opened, until the pieces are cut and ready for sewing. Automatic fabric spreading machines come with tension-free mechanisms to unwind material from the roll, and constantly monitor the tension during spreading to keep consistent tension throughout the fabric. This means that relaxation for most types of fabric can be reduced or even eliminated from the production process, which saves one or two days, plus the required labour cost, and potential for lost fabric integrity.
Automation saves time In addition to automatic fabric spreading, CAD systems help automate fabric planning and utilisation, as well as other pre-production practices. Accounting for fabric shrinkage, for instance, automatically adjusts the piece geometry, even for very tricky fabrics. Cutplanning applications then run order scenarios to ensure the best lay plans, and nesting algorithms calculate the best utilisation of the width of the fabric actually received. Such practices could save three to five days, 20 per cent of staff, and 3-12 per cent of fabric, as well as result in better quality garments. n
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AppArel / AEPC events
AEPC launched Swachhata Hi Seva Campaign
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he Apparel Export Promotion Council (AEPC) has collaborated with the Ministry of Textiles (MoT), Government of India (GoI) to launch the Swachhata Hi Seva (SHS) campaign from September 15- October 2, 2018. The campaign will spread awareness on the importance of cleanliness through the campaign The campaign commenced with a camp at AEPC’s Okhla office. The campaign was inaugurated by Smriti Zubin Irani, Union Minister of Textiles in the presence of HKL Magu, Chairman, AEPC alongwith the heads of garment industry associations and industry members. The campaign focused on Shramdan. Mass Swachhta pledge was
taken along with cleanness drive of the neighborhood of Okhlawas taken. Swatchhta Hi Seva Campaign was organised by the AEPC Noida Office in presence of Lalit Thukral, Chairman - EAC, AEPC, officials of AEPC Noida, students and faculties of ATDC. The campaign undertook a pledge on Swachhta/ Shramdan. AEPC Ludhiana office organised the Shapath of Swachhta programme in the presence of Harish Dua, EC Member, AEPC, Atul Verma Principal, ATDC, officials of AEPC Ludhiana and faculties, staff and students of ATDC. All participants at the event undertook the Shapath of Swachhta hi Seva and shramdan for cleanliness in the surrounding area of premises. AEPC Jaipur office has organised Shapath of Swachhta Programme in the presence of Rajiv Dewan, EC Member of AEPC, Rakesh Balayan, Regional Manager of ATDC, officials of AEPC Jaipur, faculties and students of ATDC. n
Mass Swachhta pledge was in presence of Hon’ble Union Minister of Textiles Smt. Smriti Zubin Irani along with Chairman, AEPC Shri HKL Magu, EC members of AEPC, Officials AEPC, students and faculties of ATDC. AEPC Bangalore office had organized Swachhta Shapath on 17.09.2018. All the Officials of AEPC & ATDC along with the students had participated in Swachhta Shapath.
Swacchta Hi Sewa campaign at Apparel House, Gurgaon was observed on 17 September, 2018 in the presence of Shri Rakesh Vaid, EC Member, AEPC and AEPC officials. Cleanliness of neighborhood and plantation of saplings were done. Pledge was on Swachta was also taken along with special drive for cleanliness of Apparel House was initiated.
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AppArel / AEPC events
AEPC Mumbai office had organized Swachhta Shapath in presence of Shri Premal Udani - EC member, AEPC.
AEPC Kolkata has conducted Swatchha Hi Seva Campaign. Cleaning of the AEPC and ATDC office and its surroundings were undertaken in the presence of Mr. Anil Buchasia, EC Member and officers and staffs of AEPC and ATDC Kolkata. Saplings of deodar tree were planted in the surrounding of the office for greenery, clean and better look of the surrounding. Mr. Buchasia read out the pledge (Swatchhta Shapath) to all present in the campaign.
Swatchhta Hi Seva Campaign was organized by AEPC Noida Office on 17.09.2018 in presence of Shri Lalit Thukral, Chairman - EAC, AEPC, Officials of AEPC Noida, students and faculties of ATDC. Mass Pledge on Swachhta/ Shramdan was also taken by the AEPC/ATDC
AEPC Ludhiana office has organized Shapath of Swachhta programme on 17.09.2018 in the presence of Shri Harish Dua, EC Member, AEPC, Shri Atul Verma Principal, ATDC, officials of AEPC Ludhiana and faculties, staff and students of ATDC. During the event all participants has undertaken the Shapath of “ Swachhta hi Seva” and shramdan for cleanliness in the surrounding area of premises.
AEPC Jaipur office has organized Shapath of Swachhta programme on 17.09.2018 in the presence of Shri Rajiv Dewan, EC Member of AEPC, Shri Rakesh Balayan, Regional Manager of ATDC, officials of AEPC Jaipur, faculties and students of ATDC were also present.
“Swachhata Hi Seva” campaign and Shramdan was organized on 18/09/18 in AEPC Office premises, Tirupur. The campaign was inaugurated by Tirupur City Municipal Corporation Commissioner Shri K. Sivakumar in the presence Dr.A.Sakthivel, Vice-Chairman, AEPC along with local EC Members and Officials from Corporation, AEPC, ATDC, industry members and public. Mr.V.Elangovan, EC Member has read the Pledge and all the dignitaries, officials and public have taken the pledge.
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AppArel / sUsTainaBiLiTy
Need for Fast Fashion retailers to tighten their eco goals A new report by Changing Markets Foundation on sustainability has yet again brought fast fashion retailers under scanner as the biggest pollutants. The report concludes that many firms are still not doing enough to ensure sustainability of their textile supply chains. While there has been bold leadership from some retailers, a large part of the industry has still not demonstrated willingness to engage on the issue or set out policies on viscose production. These include: Burberry, Ikea, Missguided, Gucci, and Prada, as well as supermarkets such as Sainsbury’s, Lidl, Morrisons and Asda.
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iscose is a soft semi-synthetic fibre commonly used to make lighter clothing and is the third mostused fibre in the textiles industry after polyester and cotton. it is created from cellulose that is chemically extracted from trees, a process that requires hazardous chemicals. a number of major producers have been accused of failing to follow adequate health and safety processes, leading to pollution from production processes impacting surrounding water and soils.
some well-known UK fashion retailers are sourcing viscose fabric from two factories in indonesia and india, which have been accused of polluting their local environments and harming human health with toxic chemicals. as per Changing markets Foundation, if managed properly, viscose has the potential to be a largely sustainable fibre as it is made from plant matter and is biodegradable.
path to sustainaBility Changing markets Foundation has set up a roadmap for sustainable viscose sourcing. seven brands have signed up so far and started engaging with their supply chains on how to
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guard against the risk of viscose-related pollution. Inditex, Asos, Marks & Spencer, H&M, Tesco, Esprit, and C&A are the first signatories. Next has reportedly indicated plans to commit to the roadmap, which sets out best available techniques for viscose production in the near future. Carmen Chan, Senior Sustainability Manager-F&F Clothing line, Tesco, says while she understood the complexity of the environmental challenge of viscose, it was not possible to tackle it alone. Collaboration is the key to help transform the textile and clothing industry. M&S has stated it will not source from any man-made cellulosic fibre suppliers which do not transition to a closed-loop manufacturing system by 2023-25, explaining such a system should recycle the majority of chemicals used during the production and prevent the process from negatively impacting human health and environment. Phil Townsend, Sustainable Raw Materials Specialist, M&S says the roadmap was an important step forward in reducing environmental impact of viscose for making clothes. However, the industry needs to work together to create positive change and achieve the Changing Market Foundation’s goals. Ikea has stated that it is working towards a goal that all Made Cellulose fibres shall come from responsibly sourced wood and be produced having minimum environmental impact to land, air and water. The two largest viscose producers in the world, Austria’s
Lenzing and India’s ABG, have both now committed to making all their sites meet EU Ecolabel requirements for production. In China, the country’s 10 largest producers have joined together to form the Collaboration for the Sustainable Development of Viscose and are developing a 10-year roadmap for improvement, the report said.
Many more to achieve… Natasha Hurley, Campaign Manager, Changing Markets Foundation says the onus was on manufacturers and their customers to turn commitments to improve their supply chains into detailed plans and ensure transparent reporting of their performance, including complaints and grievances. After many years of complacency from fashion brands and producers with regard to the environmental impacts of viscose manufacturing, the tide is finally beginning to turn towards more responsible production methods,” she said. But the unlikely bedfellows of luxury brands and discount retailers continue to ignore an issue that is blighting people’s lives and the environment. What’s more, most luxury fashion brands are failing to publicly disclose supply chain information. This is unacceptable. It’s time for them to wake up to transparency and sustainable fashion. n
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AppArel / certifications
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Sustainable materials, certifications driving apparel industry
ore and more companies are acquiring industry materials and manufacturing certifications as a part of their sustainability goals and brand building. The latest include the Oeko-Tex’s Eco Passport certification, recognised as a Level 3 ZDHC MRSL Conformance Indicator for the ZDHC Roadmap to Zero Program. This shift indicates that Eco Passport certified chemical substances meet the ZDHC’s (Zero Discharge of Hazardous Chemicals) guidelines for safer textile chemistries that are also verified as being responsibly manufactured. ZDHC MRSL Conformance Level 3 covers chemical substances that are limited or banned from use in apparel and footwear materials production and trimmed to protect workers, consumers and the environment.
Delivering sustainable products Oeko-Tex program’s Eco Passport analyses a broad set of chemicals, including colorants, scouring agents, adhesives, inks,
pigments and auxiliaries in a confidential, three-step process that confirms the formulations and individual ingredients that meet specific criteria for sustainability, safety and regulatory compliance. Its chemical formulations are checked against the comprehensive Oeko-Tex list of substances of concern and then verified through laboratory evaluation to ensure that they don’t contain unsafe contaminants. Sustainable production is verified with on-site observance of the manufacturer’s occupational safety methods, water and air protection mechanisms, and quality control practices in line
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AppArel / certifications
with STeP by Oeko-Tex guidelines for sustainable production facilities. Certified formulations are eligible to be listed on the ZDHC Gateway–Chemical Module and the Oeko-Tex Buying Guide. This helps apparel and footwear manufacturers desiring to incorporate sustainable chemistries to recognise them. It also aligns with Oeko-Tex’s mission to provide standardised solutions that optimise customers’ manufacturing processes and help deliver more sustainable products.
Ensuring consumer safety Along the same lines, DuPont Industrial Biosciences has joined with Bluesign for its bio-based, high-performance
polymer Sorona. The Bluesign system unites the textile supply chain to jointly reduce its impact on people and the environment, ensure responsible use of resources and guarantee a high level of consumer safety. DuPont Sorona, a versatile polymer comprises 37 percent renewable plant-based ingredients, using 30 percent less energy and releasing 63 percent fewer greenhouse gas emissions as compared to nylon 6 fibers. In addition to reducing a reliance on fossil fuels, Sorona polymer combines eco-efficiency with function, making it applicable for a variety of performanceoriented products. Its attributes include softness, inherent stain resistance and durability. To qualify for the Bluesign system partnership, DuPont
Sorona completed a comprehensive assessment and roadmap meeting to demonstrate its merit for the certification of its products. As a Bluesign system partner, DuPont Sorona joins a growing collection of chemical suppliers, manufacturers and brands that are responsible acting parties in the textile value chain.
For risk-free environment Its input stream management approach ensures approved chemicals and raw materials, such as DuPont Sorona polymer. These are used in all steps of the manufacturing processes to reduce risks to both people and the environment at the very beginning of the supply chain. Bolger & O’Hearn Specialty Chemicals has collaborated with Bluesign and ZDHC to place several of its chemistries on the official ZDHC list of sustainable, approved textile industry chemistries. Chemistries developed by Bolger & O’Hearn that are now approved
by Bluesign and ZDHC include: Stormproof/ Breathable OmniBloq, an advanced durable water repellent technology engineered to keep apparel dry and consumers comfortable in extreme conditions, and Altopel F3, an advanced fluorine-free water repellent. n
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India to participate in Footwear and Leather Show in Australia
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ndia will participate in the Footwear and Leather Show, to be held from November 20 to 22 in Australia. The show, organised by the Council for Leather Exports (CLE), India’s peak export trade promotion organisation for leather industry, will feature 30 footwear suppliers and leather goods/accessories and garments exhibits. It will feature a comprehensive range of footwear, leather and leather accessories from manufacturers and exporters looking at securing volume
IAF to hold World Fashion Convention in Netherlands this October
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nternational Apparel Federation will hold the World Fashion Convention in Netherlands from October 8-10, 2018. The convention attracts apparel industry leaders from across the supply chain, from all continents. The theme of this edition is ‘Building a Smart Future for the Fashion Industry.’ The three-day convention will demonstrate inspiring examples of a smarter apparel supply chain. Speakers at the show will include representatives from major brands such as Puma, Hugo Boss, Vivienne Westwood and VF Corporation. They will provide a comprehensive vision for the future of the fashion industry. Delegates will learn how block chain enables transparency, how circular fashion requires systemic changes, how better buyer-supplier collaboration is achieved, what are the major current and future sourcing trends and which new fabrics are being developed. n
OEM & ODM partnerships with a trade and buying audience from across Australia, New Zealand and beyond. Besides the intense direct business exchange on the show floor, the expo will offer learning and networking opportunities including seminars and workshops, networking events and industry presentations, providing multiple ways of engaging and establishing long-term business relationships. n
India to partner Germany at Ambiente 2019 Fair in Frankfurt
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ndia will be the partner country at Ambiente 2019 fair, to be held in Frankfurt from February 8 to 12, 2019. The fair will be attended by around 8,000 exhibitors from across the globe, out of which 450 exhibitors will be from India. The Ministry of State for Textiles has selected 10 specialised handicraft artisans from the country to demonstrate their skills at the fair. The trade show’s highlights include the Design Plus awards; Ambiente Academy- a relatively new area revolving around the actual trends and perspectives in the consumer goods sector; Speed-Dating@Ambiente for short presentations on numerous innovations, and many more. n
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AppArel / aepc event calendar
CALENDAR OF EVENTS -
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3-4 October, 2018, SPAIN
2018 9-10 October, 2018, Netherland
IAF World Fashion Convention Maastricht
Buyer Seller Meet in Madrid
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4
15-17 October, 2018, China
16-18 October, 2018, Taiwan
TITAS Taiwan Taipai
Yarn Expo China Shanghai Yarn
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27-29 September, 2018, China
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10-13 November, 2018, Taiwan
Intertextile Shanghai
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12-14 November, 2018, Dubai
Taipei In Style Taiwan Taipai
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14-16 November, 2018, Sri Lanka
International Textile & Apparel Fair UAE Dubai Fabrics APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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AppArel / Notifications
Ministry Notifications Sub.: Extension of Integrated Goods and Service Tax (IGST) and Compensation Cess exemption under Advance Authorisation, EPCG and EOU scheme upto 31.03.2019
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GFT in its notification no. 35/2015-20 dated 26 September, 2018 has extended the Integrated Goods and Service Tax (IGST) and Compensation Cess exemption under Advance Authorisation, EPCG and EOU scheme upto 31.03.2019. For Full Notification: http://dgft.gov.in/sites/default/ files/Notification%20No%2035%20%E2%80%93%2026-092018%20English.pdf
Sub.: Guidelines to apply for MEIS under the System Driven approval mechanism for MEIS applications for shipping bills from EDI ports
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GFT is its Trade notification no. 30/2018-19 dated 11 September, 2018 has stated that Directorate has been on regular basis taking measures to simplify the process of implementation of the FTP Schemes by establishing processes which are smooth, free from manual interface and are quick and efficient. In line with the Government of India’s motto of facilitating the “Ease of doing business “, DGFT would start the process of system driven approval of the MEIS claim Applications from 13.09.2018 in respect of exports made through EDI shipping bills. The procedure for exporters/ MEIS applicants and the RAs are being outlined below for information and awareness. Please follow full notification: http://dgft.gov.in/sites/ default/files/Trade%20Notice%2030_0.pdf
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AppArel / gsT UPDaTe
1. Rate of tax collection at source (TCS)- 1% to be collected by every electronic commerce operator: The TCS to be collected at the rate of 0.5% under CGST Act on the value of net taxable supplies. Similarly, rate of 0.5 under SGST Act. In case of inter-state supply, rate of deduction shall be 1%. Notification No. 52/2018-Central Tax dated 20.09.2018; IGST Notification No. 02/2018- Integrated Tax dated 20.09.2018. The provision shall come into effect from 01.10.2018.
Notification No. 48/2018-Central Tax Dated 10.09.2018. Also, the registered taxpayers filing GST TRAN-1 may submit GST TRAN-2 by 30th April 2019.
2. E-way bill not required for intra-city movement of goods in Gujarat: E-way bill is not required for intra-city movement of goods in Gujarat. Further for intra-State movement of goods for Job Work e-way bill is not required for transportation of Hank, Yarn, Fabric and Garments under Notification No. GSL/GST/ RULE-138(14)/B.19 issued by the Commissioner of State Tax dated 19.09.2018 under section 68 of the Gujarat Goods and Service Tax Act, 2017. This notification shall come into force from the 1st October, 2018.
7. Clarification on refund related issue: The circular no. 59/33/2018-GST dated 04.09.2018 clarifies various provisions of GST law related to refund of taxes like submission of invoices of refund, systems validations for refund processing etc.
3. TDS provision under section 51 of the CGST Act into force w.e.f 01.10.2018: TDS provisions under GST will be effective from 1st Oct 2018 vide notification No. 50/2018-Central Tax Dated 13.09.2018. The council has also specified such persons or category of persons who will be liable to these provisions:a. an authority or board or any other body i. set up by an Act of parliament or a state legislature or ii. established by any government with fifty-one percent or more participation by way of equity or control. b. The society established by the central government or state government or any local authority c. Public sector undertakings 4. Extension of Due Dates for filing of FORM GSTR-1 and FORM GSTR-3B in certain cases: The due date for furnishing FORM GSTR-1 for the period from July, 2017 to September, 2018 has been extended till 31st October, 2018 for all registered persons having aggregate turnover above Rs 1.5 crores including the registered persons in Kerala, or whose principal place of business is in Kodagu (Karnataka) and Mahe (Puducherry) vide notification No. 43 and 44/2018-Central Tax dated 10th September 2018 have been issued in this regard. TheGSTR-3B for the months of July, 2017 to November, 2018 has been extended till 31.12.2018. vide notification No. 45, 46 and 47/2018-Central Tax dated 10th September, 2018. 5. Extension of time limit for submitting the declaration in Form GST TRAN-1 under rule 117(1A) of the Central Goods and Service Tax Rules, 2017 in certain cases: Extension of the due date of filing of GST TRAN-1 by the taxpayers who could not file the declaration due to technical difficulties on the GST portal till 31st March 2019 Vide
6. Seeks to make amendments (Eighth Amendment, 2018) to the CGST Rules, 2017: The certain restrictions apply for claiming refund of integrated tax paid on exports of goods or services vide notification No. 39/2018-Central Tax dated 04.09.2018.
8. E-way bill in case of storing of goods in the godown of a transporter: The following changes has been made in the e-way bill vide Circular No. 61/35/2018-GST dated 04.09.2018: (i) Place of business now also includes a warehouse, a godown, or any other where a taxable person stores in goods, supplies or receives goods or services or both. (ii) in case, the goods have reached the transporter’s godown i.e. additional place of business then the transportation under the e-way bill will be deemed to be concluded. It will not need to an extension of e-way bill’s validity. (iii) The recipient shall be required to maintain books of accounts in relation to the goods stored in the godown of transporters. 9. Changes in EPCG Scheme (Public Notice No.31 /2015-20 New Delhi, Dated the 29th of August 2018): Para 50.4 of the Handbook of Procedure 2015-20, provides for installation certificate of capital goods imported under EPCG scheme. Installation is done within six months, The RA may allow one time extension of the said period for producing the certificate by a maximum period of 12 months with a composition fee of Rs.5000/-. The authorization holder shall be permitted to shift capital goods during the entire export obligation period to units mentioned in the lEC and RCMC of the authorization holder subject to production of fresh installation certificate to the RA concerned within six months of the shifting. 10. Date of EOU exemption extended: Department of Revenue has issued Notification 65/2018Customs dated 24.09.2018 extending the validity of the exemption scheme of the Export Oriented Units, vide Notification No. 52/2003-Customs, dated the 31st March, 2003 till 01.04.2019. 11. Guidelines for MEIS Scheme: Guidelines to apply for MEIS under the System Driven approval mechanism for MEIS applications for shipping bills from EDI ports [ DGFT Trade Notice No. 30 /2018-19 Dated 11th September, 2018]
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Book Your Space Join us for the
International Sourcing Expo Australia (ISEA)
20 21 22
November 2018 Melbourne Convention & Exhibition Centre, Melbourne, Australia Australia’s leading sourcing expo for the Apparel, Accessories and Textile Industry Be part of the ultimate professional platform for international sourcing, learning and networking
Why Visit
Discover first-hand new trends in fashion and manufacturing meet, compare and connect with international Buyers and Buying experts expand your network commercial opportunities
Product Profile
Womenswear, Menswear, Childrenswear and Fashion Accessories
For further details, please contact: Mr. K S Bisht, Joint Director (Fairs & Exhibition) +91 124 2708156 (D), +91 9810527747, Fax : +91 124 2708004, E-mail: kbisht@aepcindia.com
The Application form may be downloaded from our website www.aepcindia.com (Highlights Section)
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