Apparel India June 2018

EAI 01 ISSUE 03

100

JAPAN

An Important Market for India

Middle East

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APPAREL / CHAIRMAN’S MESSAGE

Dear Friends, The summer is at its peak and so is the situation in the apparel industry. The crisis in the Industry is heating up and to mitigate the same, AEPC is making a holistic effort to reverse the trends of sliding exports through regular consultations with the Ministry of Textiles, Commerce, Finance and Dept. of revenue on subjects like refund delays, better drawback and ROSL rates, FTAs and other competitiveness issues. I am happy to share that there have been some very fruitful discussions and results have started trickling in.

The extension of the MEIS beyond June 2018 has been the first relief received by the industry. My gratitude to the Honorable Commerce Minister and the Honorable Textiles Minister for favorable consideration of our recommendations. Responding to the Industry’s request for a meeting to address the serious down slide in textile and apparel exports Hon’ble Finance Minister, Mr. Piyush Goyal and Hon’ble Minister of Textiles, Mrs. Smriti Irani, along with senior representatives of both the ministries met the AEPC team on 27th May 2018. The Finance Minister has assured us that the pending GST will be cleared at the earliest. For the same a second fortnight has also been organised from 31st May 2018. Hope the exporters have availed of this opportunity to clear their refund issues.

The finance minister has also given us the assurance of clearing RoSL pendency and accordingly the additional funds have been released. I request our members to confirm their status of RoSL refunds and other related details judiciously to the council on a monthly basis as we have been mandated to update the status of the apparel package in terms of additional employment, exports and investment. I also invite any issues you are facing in getting the refunds. Our dedicated help desk and regional offices will take up such cases to facilitate the refunds.

Let me take this opportunity to heartily congratulate and welcome Mrs Jaya Dubey, Joint Secretary, Ministry of Textiles on taking additional charge as Secretary General of AEPC . We look forward to her able leadership and constructive guidance towards the development and improvement of the Indian Apparel Industry. I would also like to thank the outgoing Secretary General, Mr. Ram Singh (IPS) for his strong engagement and valuable contribution to AEPC and the trade. We wish him very best for his future endeavors.

The event calendar has started buzzing with one event after another lined up till at least the end of the year.

The first on the list is of course the 61st IIGF which for the first time is going to be held at the expo mart in Greater Noida. My best wishes to the buyers and exporters.

I will urge the apparel exporters who could not renew the membership to do the same without delay.

We would be glad to extend all the facilitation to our members. Last but not the least, the twitter handle of AEPC is up and running - you can follow or tweet us at https://twitter.com/ApparelCouncil.

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6/5/2018 5:05:52 PM

EAI 01 ISSUE 03

100

JAPAN

An Important Market for India

Middle East

emerging as a fashion hotbed

CHAIRMAN AEPC Mr. HKL Magu CHAIRMAN EP Mr. Sudhir Sekhri ADDITIONAL SECRETARY GENERAL Anil Kumar Vasu Pillai ADVISOR AEPC Mrs. Chandrima Chatterjee PUBLISHER Apparel Export Promotion Council

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

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C O N T E N T S EAI 01 | ISSUE 03

04 | The Broadcast

35 | Guest Column

06 | Trade Concerns

36 | Sourcing

Updates on India’s RMG exports and IIP

AEPC shares export concerns with minister

08 | Skilling

MOU Signing ceremony between ATDC & Groz Beckert

10 | Brand Retail News

Global fashion sales expected to triple by 201618

US retail sales rises 0.4 per in April

11 | Brand Retail News

US underwear/lingerie market to grow over 5 per cent

VF Corp’s revenue up 22 per cent, touch $3.0 bn in Q1FY18

Rupee on its way to 70

ASEAN’s growing importance and gains for member countries

38 | Trends

Luxury brands become sportier

Fitness trends fuel brand growth in China

39 | Tech Trends

Fast Fashion companies using data analytics: McKinsey study

Digital transformation in leading fashion industry

40 | Tech Trends

Demand mapping gets easy with artificial intelligence

12 | Brand Retail News

42 | Circular Economy

American Apparel’s stores reopen post bankruptcy

44 | Events

Gap’s quarterly sales expected to be $3.61 bn

14 | Brand Retail

Fast fashion brands reworking on strategies to lure customers

18 | Trade Concern

Growing apparel exports from Bangladesh hurting domestic industry

20 | Export Views

US quarterly apparel imports rise, China and India lose market share

Vietnam textile and apparel exports value up 15 per cent

China’s April exports bounce back

Sri Lankan apparel exports up four per cent

Tirupur’s knitwear exports fall

Making Fashion Circular

45th India International Knit fair held in Tirupur

46 | AEPC Events

AEO seminar conducted in Gurugram Mumbai and Bengaluru

48 | Industry Overview

Outgoing NCTO chairman outlines priority areas for US textile industry

50 | Connect 2018

Changing logistics dynamics to support apparel industry

52 | Indian Fashion

Designers, entrepreneurs bring the focus back on Indian weavers

55 | AEPC Event Calendar

Calendar of Event - 2018

56 | GST Update

22 | Export Views

Cambodia’s exports to the US up 25 per cent

Asean apparel exports to the US on the rise

Bangladesh garment exports up nine per cent

FAQ on E-Way Bill – Part B

56 | Notifications

Ministry Notifications

56 | Notifications

24 | Market

Middle East emerging as a fashion hotbed

28 | Cover Story

21 | Export Views

JAPAN An Important Market for India

34 | Trade Treaties

India’s FTAs need to be reworked

India vacillates on RCEP

Ministry of Commerce & Industry

Creation of Directorate General of Trade Remedies (DGTR) in Department of Commerce.

Posted On: 09 MAY 2018 7:20PM by PIB Delhi

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APPAREL / THE BROADCAST India’s Ready-Made Garment (RMG) Export Update for FY (April) 2018-19 India’s RMG Exports RMG exports were to the tune of USD 1349.81 million in April 2018 with the decline of - 22.76 per cent against the corresponding month of April 2017, which was USD 1747.44 million.

In rupee term export for the Month of April 2018 was Rs. 8859.67 Cr. as against Rs. 11272.24 Cr. in April 2018 with the decline of - 21.40 per cent.

India’s RMG export to World in the April-March of 2017-18 was to the tune of USD 16716.5 mn. which has decreased by -3.83 per cent compared to the same period of previous financial year. During AprilMarch 2016-17, India’s apparel exports were to the tune of USD 17382.8 mn.

India’s RMG Export to World Month

April

FY 2017-18

FY 2018-19

In INR Crore In US$ Million

In INR Crore In US$ Million

11272.24

1747.44

8859.67

1349.81

MoM Growth of 2017-18 over 2016-17 (%) INR

US$

-21.40

-22.76

Source: DGCI&S, Kolkata, 2018

India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-March) 2017-18 INDEX OF INDUSTRIAL PRODUCTION MoM Growth Rate Manufacture of MoM Growth Rate Manufacture of textiles (In %) wearing apparel (In %) Month 2016-17 2017-18 2017-18/2016-17 2016-17 2017-18 2017-18/2016-17 April 114.3 116.1 1.6 150.7 152.7 1.3 May 120.6 116.8 -3.2 166.8 158.5 -5.0 June 120 117 -2.5 153.3 148.4 -3.2 July 119.4 115.9 -2.9 144.5 137.1 -5.1 August 119.5 116 -2.9 147.5 138 -6.4 September 119.3 113.6 -4.8 142.3 132 -7.2 October 116.3 114 -2.0 140.4 125 -11.0 November 114 115.6 1.4 127 110.4 -13.1 December 114 120.2 5.4 159.6 138.1 -13.5 January 118.1 121.3 2.7 161.8 144.5 -10.7 February 112.5 115 2.2 156 148.7 -4.7 March 120.5 118.1 -2.0 170.1 138.4 -18.6 Total 117.4 116.8 -0.5 151.7 135 -11.0 April-March Source: CSO, 2018 Summary • Manufacturing of Textiles has shown a decline of -2% in March, 2018 and decline of -0.5% for the period of April-March, 2017-18 • Manufacturing of Wearing apparel has shown a decline of -18.6% in March, 2018 and -11% for the period April-March, 2017-18 • Manufacturing of Wearing apparel is showing a decline since last 11 months

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APPAREL / TRADE CONCERNS

Dr. A. Sakthivel, Vice Chairman AEPC meets Hon’ble Union Minister of Textiles Smt. Smriti Zubin Irani

AEPC shares export concerns with minister

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r. A. Sakthivel, Vice Chairman AEPC met Smt. Smriti Zubin Irani, Hon’ble Union Minister of Textiles in her office at New Delhi and flagged the issue of the continuous decline in Apparel Exports.

He also informed the minister about the decline in apparel production which has been on a slide for the 11th straight month.

In March apparel production has been down by 18.6% .

Dr. Sakthivel discussed measures and chalked out ways to arrest down slide in apparel exports. He also made a request to the Hon. Minister for considering refunding the embedded taxes to the tune of 4-5% to the Industry which will fill the gap of reduced drawback and ROSL. The Vice Chairman has requested Hon’ble Minister to take up the issue of FTA to Europe with Commerce Ministry for further growth of our exports since our competitive countries are enjoying the duty free status.

Dr. Sakthivel thanked Hon. Union Minister on behalf of the apparel industry for her efforts and support for reviving the industry. n

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India Trend Fair Tokyo, Japan 19-21 Sep 2018

Have you booked your space yet

• More than 2500 professional visitors expected.

• Organised by Apparel Export Promotion Council and Japan India Industry Promotion Association.

• An exclusive Business Matching Event.

• An opportunity for exporters to showcase their products and supply capabilities.

• Special emphasis on Japanese fashion trends and requirements.

• Buyer profile-Manufacturers, Wholesalers, Trading Companies, Importers, Speciality Stores, Departmental stores, Volume and Online Retailers etc.

TO AVAIL EARLY BIRD DISCOUNT APPLY BEFORE MAY 21 2018 For further details, please contact: Mr. K S Bisht, Joint Director (Fairs & Exhibition) +91 124 2708156 (D), +91 9810527747, Fax : +91 124 2708004, Email : kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section)

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APPAREL / SKILLING

MOU

Signing ceremony between ATDC & Groz Beckert

From Left to Right: Mr. Anton Reinfelder, MD, Groz- Beckert Asia Pvt. Ltd. Mr. G. S. Madan, Vice Chairman & Dr. Darlie Koshy DG & CEO, ATDC exchanging MoU towards CSR support to “Vocational Training & Skill

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pparel Training & Design Centre (ATDC), India’s Largest Quality Vocational Training Provider for the Apparel Industry has signed an MOU with M/s. GROZ-BECKERT ASIA PVT. LTD., under the CSR Initiative for Vocational Training at select ATDC centres like ‘Ludhiana’, ‘Tirupur’, ‘Noida’, ‘Mumbai’, ‘Ranchi’, ‘Indore’ and ‘Okhla’.

The MOU has been signed between Dr.Darlie. O. Koshy, DG & CEO, ATDC on behalf of ATDC and Dr. Anton Reinfelder, MD, on behalf of GBA, in the gracious presence of Shri. G.S. Madan, Vice-Chairman, ATDC and EC member of AEPC. Under this CSR initiative, GROZ-BECKERT ASIA, has sponsored full Course Fee, tool Kit etc. for training

of 40 candidates in longer duration (1 year) AVI diploma course at select ATDC centres- Ludhiana, Tirupur, Noida and Mumbai and 80 candidates in short duration programs.

Speaking on the occasion Dr.Darlie O Koshy, DG &CEO, ATDC thanked GBA for reposing confidence in ATDC to implement the CSR initiative of GBA and this gesture certainly shows that Groz-Beckert Asia appreciates ATDC’s pursuit of Skill. He said that ATDC’s endeavours of skilling the youth of disadvantaged sections of society are fully supported by AEPC’s 8150 registered exporters by gainfully employing the ATDC trained candidates in various garment factories in several apparel clusters in the country, resulting in 73% wage placement as confirmed by MoT’s Portal (GoI).

Dr. Anton Reinfelder, MD, GrozBeckert Asia thanked the ATDC management in his address for inviting and welcoming him along with GBA team on the occasion of signing of MOU. He was impressed with the state of art facility and infrastructure at ATDC and training programs ATDC conducts especially with focus both on theory and practical classes which is like the dual training system in Germany. Dr. Anton said he is always looking to interact closely with students as it gives them good exposure and opportunities to prepare themselves better to perform on joining the industry.

Speaking on the occasion, Shri. G.S. Madan, Vice Chairman, ATDC said that it’s an honor to associate ATDC with such an old company, established with a history of 170 years, known for its quality, which has helped it to remain in market for these many years. Mr. G. S. Madan assured ATDC will do its best to extend the benefits ofthe support to the deserving students.

Other dignitaries present on the occasion were Mr. Sanjay Chawla (VP Sales& Marketing), Mr. Harvinder Singh (AGM HRD & Admin), Mr. Shashi Kanwal, CSR Consultant and Mr Sanjay Sharma (Manager Sales-Sewing Division) all from Groz-Beckert Asia Pvt. Ltd. All HoD’s of ATDC NHO attended the function. n

M

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DISCOVER THE FASHION MARKET OF SPAIN! UNCOVER YOUR F UT URE MARKET GROW TH!

Join us for the

Buyer-Seller Meet Madrid, Spain

3-4 October, 2018

For further details, please contact: Mr. K S Bisht, Joint Director (Fairs & Exhibition) +91 124 2708156 (D), +91 9810527747, Fax : +91 124 2708004, kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section)

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APPAREL / BRAND RETAIL NEWS

Global fashion sales expected to triple by 2016-18

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ashion industry sales are expected to triple from 2016 and 2018. And emerging markets remain a crucial source of this growth.

In 2018, for the first time, more than half of apparel and footwear sales will originate outside Europe and North America. The main sources of growth are: Asia-Pacific, Latin America and other regions. They are forecast to grow between 5 and 7.5 per cent in 2018.

Meanwhile, the economic outlook in mature part of Europe is stable, and fashion industry sales growth is likewise expected to remain at a modest but steady two to three per cent. In North America, while overall consumer confidence is strong, the impact of policy changes is uncertain, and markdown pressures, market corrections, and store closures continue. Here, growth is expected to

be modest, one to two per cent.

Consumers are trading away from the midmarket price point even while luxury, value, and discount segments are picking up speed. Stronger sales growth is expected in apparel and footwear. Handbags and luggage, and to some extent watches and jewelry, are returning slowly to their historic highs, driven by demand in Asia-Pacific.

Athletic wear is the only category where record growth rates look to slowdown slightly in 2018.n

US retail sales rises 0.4 per in April

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s per National Retail Federation, sales in the US retail market, during April 2018, marked a slight increase of 0.4 per cent on the seasonally adjusted basis over March and 2.8 per cent yearover-year. Retail sales during March were up 0.3 per cent on monthly and 5.2 per cent on year over year basis.

Segment-wise, sales in furniture and home furnishings during the period increased 5.8 per cent and by 0.8 per cent from March (seasonally adjusted).

Whereas, clothing and clothing accessory store sales declined 0.4 per cent Y-o-Y and up1.4 percent from March on the seasonally adjusted basis.

During the review period, 12.2 per cent

increase was reported in online and other non-store sales year-over-year and increased 0.6 per cent over March on seasonally adjusted basis. However, general merchandise stores noted 0.8 per cent decline year-over-year but was up 0.3 per cent from March seasonally adjusted. n

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APPAREL / BRAND RETAIL NEWS

US underwear/lingerie market to grow over 5 per cent

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report published by Persistence Market Research reveals, the US men’s underwear and women’s lingerie market is expected to grow significantly at a CAGR of 5.4 per cent by 2021. This is mainly owing to rising personal income in US households; propagation of modern retail formats such as supermarkets, discount stores, and pharmacy stores; change in lifestyle; and rising awareness about health and fitness and personal hygiene among men and women.

The US men’s underwear market was estimated at $3,236.4 million in 2015, and is expected to register a CAGR of 5.1 per cent over the forecast period. Meanwhile, women’s lingerie

VF Corp’s revenue up 22 per cent, touch $3.0 bn in Q1FY18

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F Corp, a global leader in branded lifestyle apparel, footwear and accessories, clocked in $3 billion revenue in Q1 2018. The company’s revenue soared 12 per cent including a $233 million contribution from the Williamson-Dickie acquisition.

Gross margin increased to 50.8 per cent, as benefits from a mix-shift towards higher margin businesses and changes in foreign currency were partially offset by the impact of Williamson-Dickie acquisition.

market revenue is anticipated to grow at a CAGR of 5.4 per cent from 2015 to 2021.

Major players in men’s underwear market are: Hanes Brands, Philips-Van Heusen, American Eagle Outfitters, Ralph Lauren, Jockey International, and Gildan Activewear.

Similarly, major players across the value chain in women’s lingerie market are: Victoria’s Secret (LBrands), Calvin Klein, Fruit of the Loom (Berkshire Hathaway), Hanky Panky, Cass and Company, and Commando LLC. n

Operating income was $311 million.

On an adjusted basis, operating income increased 14 per cent to $330 million, including a $16 million contribution from the Williamson-Dickie acquisition.

Operating margin on a reported basis decreased 10.2 per cent. Adjusted operating margin went down 10.8 per cent.

Adjusted operating margin, excluding the Williamson-Dickie acquisition, declined to 11.2 per cent.

VF is in the midst of a transformation to become a purpose-led, consumer-centric organisation. Steve Rendle, Chairman, President and CEO says VF’s transition period results were strong as broad-based growth acceleration that began in the second half of 2017 continue the core growth engines are driving strong global momentum as it began to enter the acceleration phase of 2021 strategy.

International revenue is expected to increase 13 to 15 per cent. By geographic region, European revenue is expected to increase 13 to 15 per cent. Asia Pacific region is expected to increase 15 to 17 per cent and, in the Americas (non-US) region, revenue is expected to increase 10 to 12 per cent. n

APPAREL EXPORT PROMOTION COUNCIL MAGAZINE

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APPAREL / BRAND RETAIL NEWS

Gap’s quarterly sales expected to be $3.61 bn

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s per Zacks Investment Research, Wall Street brokerages have forecasted Gap’s sales will be worth $3.61 billion for the current quarter. Nine analysts have issued estimates for Gap’s earnings with the lowest sales estimate being $3.45 billion while the highest being $3.75 billion. The company

American Apparel’s stores reopen post bankruptcy

reported sales of $3.44 billion in the same quarter last year, suggesting a positive year on year growth of 4.9 per cent. Zacks, analysts expects Gap to report full-year sales of $16.30 billion for the current fiscal year, with estimates ranging from $15.93 billion to $16.77 billion.

For the next fiscal year, analysts expect the firm to report sales of $16.67 billion per share, with estimates ranging from $15.93 billion to $17.37 billion. n

online sales to 200 countries last month.

The first store will be a test model.

It could be a franchise model, and a few more will be opened later. Before bankruptcy, American Apparel’s clothes were produced in the US. Now most of the clothes are made at either Gildan’s factories in Central America or subcontracted elsewhere.

In its heydays, American Apparel, ran 280 stores and five factories. Gildan’s main line of business is clothing such as T-shirts, underwear and socks. It competes with Hanesbrands and Fruit of the Loom. The

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merican Apparel plans to open a flagship later this year, its first foray into brick-and-mortar after all its stores closed down post bankruptcy. The brand was bought over by Canadian Gildan Activewear last year. Since purchasing American Apparel, Gildan integrated the brand into its own low-cost manufacturing chain and focused first on selling blank T-shirts and other items to wholesalers, which customize them for sports teams or events. It then relaunched the brand’s US website in August and expanded

company is merging different business units and bolstering distribution to strengthen its e-commerce business. American Apparel also has given Gildan a foothold in the lucrative niche of fashionable basics. n

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BOOK YOUR BOOTH

Hong Kong Fashion Week Spring Summer 2018-19

09-12 July 2018

Hong Kong Convention & Exhibition Center, Wan Chai, Hong Kong

ABOUT HKFW

• • • •

Hong Kong Fashion Week in last Spring Summer 2017 drew in 1515 exhibitors from 21 countries and regions.

10000 Buyers visited from 57 countries and regions around the world.

Several buying missions from all over the world, were organized.

Among the participants are representatives of famous fashion labels, mega chain stores and distributors from both traditional and emerging markets, including Spain's Beni Room, Japan's H.P. France, Thailand's Jaspal and the Chinese mainland's The Fashion Door.

WHY PARTICIPATE

HKTDC’s Hong Kong Fashion Week for Spring Summer is an unrivalled garment sourcing platform and style leader of Asia. It is the largest fair of its kind in Asia and has continued to bring the ultimate in style and value to trade visitors from all over the world.

REGISTER EARLY AND SAVE!

Last Date for Early Bird Discount - 18 May 2018 For further details, please contact: Mr. K S Bisht, Joint Director (Fairs & Exhibition) +91 124 2708156 (D), +91 9810527747, Fax : +91 124 2708004 Email : kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section)

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APPAREL / BRAND RETAIL

FAST FASHION brands reworking on strategies to lure customers

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oon after releasing its Q4 results for 2017, Swedish brand H&M which had incurred the biggest profit decline in six years — 14 per cent for the full year —shut down 170 stores in 2018. Speaking on the results, Karl-Johan Persson, CEO, said, fashion industry is changing fast. At the heart of the transformation is digitisation, which is driving the need to transform and rethink faster. Experts point out, it’s the company’s lagging production cycle visà-vis competitors such as Zara, Asos and Boohoo

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APPAREL / BRAND RETAIL

(H&M’s cycle can take up to six months with much of its production in Asia, while others are able to manufacture and deliver products in a matter of weeks), that has caused trouble. While some argue, H&M’s merchandising as being less than savvy, with too many basic tees and jeans, and not enough trends to compel shoppers.

H&M’S NEW CUSTOMER-CENTRIC INITIATIVES To drive growth, fast fashion companies are adopting various initiatives. For example, H&M is launching two initiatives that could help it diversify. First is, Afound, a brand that will sell various clothing labels including H&M at a discount. Second, it has dropped a prelaunch collection for /Nyden, an affordable luxury brand aimed at millennials. The new collection will focus on what the company calls co-creation, culling designs from various personalities to create capsule collections, inviting fans to submit photos of themselves through Instagram hashtag ‘iamnyden’ for a chance to win a trip to Los Angeles to design their own collaboration for the brand. /Nyden will also use the ‘drop’ system that department stores like Barneys New York have enacted outside the traditional four-season system.

However, it remains to be seen if this strategy proves successful for the company.

Indeed, these moves could surely help in reigniting interest in H&M and transform deliveries into ‘drops’ and help retain the attention of distracted consumers. The co-creator initiative is a new way for the company to continue its collaborative reputation.

NEW STRATEGIES GALORE Meanwhile, Zara is steadily increasing higher-price-point items within its Studio col-

lection, while lowering its entry-level price points by as much as 50 per cent in markets like India. It is also launching an augmented-reality presentation to debut in stores. This will allow shoppers to view specific looks from the spring collection when a mobile phone is held up to a sensor within the store on in shop windows. Asos, on the other hand witnessed a jump of 145 per cent last year. This reflects that fast fashion is here to stay. With the right balance of luxury, midlevel brands and department stores, these companies must diversify their marketing and merchandising and digital/brick-and-mortar mix to retain the attention of a younger, dramatically different customer. n

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APPAREL / TRADE CONCERN

Growing apparel

exports from Bangladesh hurting domestic industry

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ncreasing apparel imports particularly from Bangladesh is silently disrupting India’s domestic textile value chain from fibre to apparel, suggest some reports. The industry has asked for immediate government intervention to impose sourcing restrictions in order to cut the damage. A team lead by Prabhu Dhamodharan, Convenor, Indian Texpreneurs Federation (ITF), met Suresh Prabhu, Union Minister for Commerce and Industry to show their concern.

Statistics reveal, apparel imports into India rose from $10.94 million in 2009 to cross $100 million-mark in 2015 before soaring to $136.43 million in FY2016. As per a 2006 treaty with Bangladesh, India allows dutyfree import of readymade garments from

Bangladesh under SAFTA. Initially this facility was limited to 8 million pieces but in 2010, this quantitative restriction was lifted.

Made-in-Bangladesh garments import surged thereafter. From a CAGR of 67 per cent between 2006 and 2010, it rose to 98 per cent between 2011 and 2014.

THE REAL PICTURE As a matter of fact, Bangladesh does not produce enough fabrics domestically. The duty-free, quota-free facility extended to Bangladesh benefits China’s export of textiles. Chairman AEPC Mr. HKL Magu points out that, “Increasing imports from Bangladesh is a concern for our domestic industry. Better rules of origin is recommended so that the FTA does not hurt

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APPAREL / TRADE CONCERN

the fabric and garment industry”. India, on the other hand, has not imposed any sourcing restrictions. To top it all, the dutyfree quota facility has now been extended to all 49 LDCs on a non-reciprocal basis and without any sourcing restrictions.

Not only this, the entire scenario would be detrimental to some LDCs like Ethiopia, Cambodia and Myanmar, which have dutyfree access to the EU, Japan and US markets.

The duty-free facility given to Bangladesh on grounds of it being a Least Developed Countries (LDC) was actually benefiting China’s textile exports. In pre-GST scenario, import of garments from Bangladesh and other countries were attracting a CVD (Countervailing Duty) of 12.5 per cent and education cess of 3 per cent. However, post-GST, this has been removed, hence there is no cost for garment import from Bangladesh and other countries.

REVISING SAFTA RULES

can make amendments to help the domestic industry without really denying duty free market access to Bangladesh and other LDCs. Such a move will prevent China from taking undue advantage of a facility that is meant for LDCs. This measure is also expected to give a fillip to India’s export of yarn and fabrics to Bangladesh and other LDCs, which at present, are being supplied by China. n

To make things in favourable for of Indian companies, ITF and CITI have suggested a revision of SAFTA (South Asian Free Trade Area) rules of origin to make use of yarn and fabric of Indian origin mandatory for allowing duty-free quota-free market access. As Dhamodharan says, this would boost the country’s yarn and fabric export to Bangladesh and other LDCs. India has accepted sourcing restrictions imposed by Japan. This has hurt our apparel exports to Japan under India-Japan CEPA (Comprehensive Economic Partnership Agreement). Giving example of global practices of imposing sourcing restrictions, Jain says the US imposed sourcing restriction under NAFTA for accepting duty free import of garments from Mexico and other NAFTA members. On similar lines, the government

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APPAREL / EXPORT VIEWS

US quarterly apparel imports rise, China and India lose market share

D

uring the first quarter of 2018, US apparel imports were up in both value and volume terms by 1.63 per cent and 1.71 per cent respectively. However, unit prices did not change, which helped in keeping the balance between imported apparels and dollars spent on them.

China lost share by 2.34 per cent in the quarter.

China is still the top supplier of apparels and textiles to the US. Vietnam too lost share, with 14.86 per cent share in overall US apparel imports this quarter.

India plunged significantly both in value (0.79 per cent) and volume (2.53 per cent) terms.

Similarly, Indonesia’s exports dropped 5.78

per cent and 8.26 per cent both in value and volume. Other top apparel suppliers were: Cambodia, South Korea, Mexico,

Canada, Bangladesh and Pakistan.

During January to April 2017 apparel exports from China, Vietnam and Bangladesh constituted around 59 per cent of total apparel imports by the US. China has been slashing unit prices to stay competitive in the US and thereby convincing buyers to purchase more quantities. n

Vietnam textile and apparel exports value up 15 per cent

E

xport value of Vietnam’s textiles and garments in the first four months showed a year-on-year increase of 15.7 per cent. Export value of textiles to the US surged 11.6 per cent. Vietnam’s exports to the US account for 47.3 per cent of the country’s total garment export. The export value of textiles and garments from Vietnam to Japan was 19.6 per cent higher than the same period last year, accounting for 13.3 per cent of the total export value.

Export value of textiles and garments to South Korea increased 14.8 per cent and 40.9 per cent, respectively, against the same period in 2017. The value of exports to the European Union rose 11.8 per cent.

The value of exports to Asean rose 26 per cent. Vietnam is targeting $35 billion total textile and garment export value for this year. Enterprises have been asked to fully exploit the working capacity of their workers as well as restructure their management

practices to improve labor productivity.

Besides maintaining and developing export markets such as the United States, European Union, Japan and South Korea, enterprises are focusing on developing other markets such as Asean, the Eurasian Economic Union, India and Latin America, including linkage with the distribution system in the local market. n

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APPAREL / EXPORT VIEWS

China’s April exports bounce back

C

hina’s exports rebounded more strongly than expected in April suggesting a resilient global demand. China’s April exports rose 12.9 per cent from a year earlier, beating analysts’ forecasts for a 6.3 per cent increase and snapping back from a 2.7 per cent drop in March that economists believe was heavily distorted by seasonal factors.

Exports growth was led by a 20.7 per cent increase in shipments of high-tech products, led by mobile phone.

Economists at ANZ believe some Chinese exporters may be accelerating electronics shipments amid tariff threats.

China’s move towards higher-value exports is clear, with shipments of lower-end products like shoes and apparel

declining year-on-year but its strategic tech sector is firmly in the cross hairs of the White House. China’s April imports also grew strongly, suggesting domestic demand remains resilient despite rising corporate borrowing costs and cooling property sales. Imports grew 21.5 per cent on-year, beating analysts’ forecast of 16 per cent growth, and accelerating from a 14.4 per cent rise in March. n

Tirupur’s knitwear exports fall

E Sri Lankan apparel exports up four per cent

S

ri Lanka’s apparel exports grew 4.1 per cent during the first quarter of this year. Apparel exports to the European Union grew by 5.2 per cent year on year while exports to the United States grew by 5.1 per cent year on year. However, exports to the EU slowed down during March, recording only a marginal growth of 0.5 per cent year on year. In contrast, apparel exports to the United States grew significantly by 17.7 per cent year on year. The trade dispute between the US and China is helping Sri Lankan apparel exports to the US. Both apparel and textile exports during the first quarter of 2018 grew four per cent year on year. The country has targeted $5.5 billion in apparel exports this year with a minimum 10 per cent growth in exports to EU countries.

However, there’s a concern about the European markets due to weather conditions. With long winter in Europe, the retail sector has slowed down as it has led to lower spend.

Some manufacturers in Sri Lanka are still engaged in manufacturing basic apparel despite the country’s gaining the GSP Plus concession last year. n

xports of Tirupur garments shrunk for the first time in past five years. Exports declined by 8 per cent to Rs 24,000 crore in 2017-18.

One of the main reasons for this is the slump in national exports by around 13-14 per cent since October 2018.

The duty drawback scheme available to exporters was also slashed to 2 per cent from 7.6 per cent in the latter half of the year, which put India at a disadvantage vis-à-vis competing countries such as Bangladesh, Sri Lanka and Vietnam.

Tirupur accounts for 46 per cent of the total knitwear garment exports from the country. The total knitwear exports India too saw dip last year. But the drop has been more for Tirupur exports. Delay in GST refund and state levies is seen as another reason for the setback as it has crunched the working capital flow. n

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APPAREL / EXPORT VIEWS

Cambodia’s exports to the US up 25 per cent

C

ambodian exports to the United States witnessed a sharp increase during the first three months of the year after the US renewed its Generalised System of Preferences in March. Exports were worth $903 million during the first quarter of the year, compared to $719 million during the same period in 2017 – an increase of more than 25.5 percent.

Bulk of these exports comprised travel goods, a category that has attracted a large number of investors after Cambodia was granted duty-free benefits for travel goods

Asean apparel exports to the US on the rise

F

or the first quarter Asean apparel exports to the US surged 0.95 per cent in export volumes while in value terms it escalated by 1.38 per cent. Readymade apparel exports from Vietnam to the US grew 3.32 per cent yearly. Cotton and manmade fiber apparel exports were up 0.73 per cent and 6.25 per cent respectively. Indonesia’s apparel exports to the US fell 5.78 per cent. In volumes too Indonesia’s exports was down 8.26 per cent. However, Cambodia’s apparel exports to the US jumped 12.52 per cent. Volume-wise, Cambodia marked grew 12.75 per cent.

Exports from Philippines dipped 9.41 per cent and volume went down 5.98 per cent.

Malaysia’s export fell 13.85 per cent and export value fell 10 per cent.

And Thailand’s export volume was 1.94 per cent and value was up 2.40 per cent. The textile and clothing industry is one of the most important manufacturing industries of Asean countries like Vietnam, Indonesia, Cambodia, Myanmar and Thailand. Garments produced by Cambodia are mainly exported to the US and European Union. n

exports under the US’s GSP program in 2016. Orders of garment and footwear products have remained stable.

On March, US President Donald Trump signed the Consolidated Appropriations Act, which extended the country’s GSP program, a scheme established in 1974 to promote economic growth in the developing world by allowing access to duty-free privileges for least developed countries. The extension will expire in December 2020. n

Bangladesh garment exports up nine per cent

B

angladesh’s garment exports grew 9.37 per cent year-on-year in the first 10 months of the fiscal.

Knitwear exports rose 11.43 per cent and woven garments exports were up 7.42 per cent. Shipment of garments, which account for more than 80 per cent of national exports, grew because of increased sales of high-value items and the depreciation of the local currency against the dollar.

The industry is confident about achieving more than 10 per cent garment export growth at the end of the fiscal year as the trend in the international market shows very bright prospects. The country’s garment factories are full of orders from international retailers and brands, thanks to the massive progress in workplace safety carried out by Accord and Alliance. Exporters also benefitted from the depreciated exchange value.

Cotton, cotton products, and yarn exports went up 19.01 per cent. Jute and jute goods exports rose 7.66 per cent. Home textile export rose 13.07 per cent, footwear 5.29 per cent and furniture 21.86 per cent. n

22 / APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | June 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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APPAREL / MARKET

Middle East emerging as a fashion hotbed

T

homson Reuters’ ‘State of the Global Islamic Economy Report’, recently indicated that Muslim consumers’ spending on apparels was the highest in 2015, around $243 billion and is projected to touch $368 billion by 2021. A Pew Research Center study too says, Muslims are the fastest growing religious group in the world, estimated to increase the population

of Islamic Faith by 70 per cent in the next 40 years. And to tap this opportunity, brands are increasingly finding means and ways to lure them.

These reports point towards a critical aspect that age and location make a big difference when it comes to clothing in the Middle East, which is the largest region of concentration for the Muslim community. The way a certain set of people dress reveal not only their personality but also the region and social class they belong to. In the Middle East, local traditions and Western fashion mix together pave way for a new market

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which designers and brands are now eyeing with interest. When comparing the variables of age, economic class, and education, not all Muslim consumers exhibit same spending habits or fashion preferences.

Millennials and Gen Z consumers in the region are increasingly moving towards westernised clothing concepts, reserving more traditional styles for ceremonial and religious occasions, while the older generations continue the trend of traditional garments.

Within the region also, from Morocco to Oman, the concepts of modest dressing and traditional garments deviate from one country to another and the clothing is also dictated by the climatic conditions prevalent in that area. Many women in Lebanon do not cover their head but a majority of women in Saudi Arabia still have to wear a niqab. People living in cities are more attentive to latest fashion trends, while those in smaller towns and rural areas are still conservative, following traditional norms.

CHANGING PREFERENCES Arab women wearing hijab seems to have become a stereotype today. Rising literacy rates and blurring boundaries point towards the acceptance of western clothing in these regions. Recently, Sheikh Abdullah al-Mutlaq, a member of the Council of Senior Scholars, and a senior member of top Muslim clerical body in Saudi Arabia, stated women need not wear loose-fitting, full-length robes symbolic of the Muslim faith known as the abaya.

Some Muslim countries have even gone ahead and started following top fashion trends. These include: Lebanon, Dubai, Jerusalem and Jordan. In Lebanon, women have little in common with the fashion preferences of Saudi Arabian and UAE women. They are open to experimentation with westernised fashion concepts. Women prefer more revealing clothes with shorter hemlines and longer necklines. In countries like Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and Yemen, the emphasis is more on traditional dressing.

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APPAREL / MARKET

MULTI-BRAND RETAILER STORES EXPANDING BASE The younger cohort (people under 30 years) in the UAE, Saudi and Qatar make up more than half the entire population. There are some 350 million people in these countries still below 26. While a bigger purchasing power lies with the older generation. With the country boasting of a wealthy consumer base in terms of GDP per capita the opportunities for luxury clothing are immense. Tapping huge potential, mainstream international brands have expanded their clothing lines into the Modest Fashion, launching across the region and also stocking modest fashion products. Brands such as Dolce and Gabbana, Burberry, Nike, and Uniqlo have introduced exclusive modest fashion ranges.

Meanwhile at International Fashion Weeks Muslim designers have emerged strong. All this together, signal the dawn of a new era in fashion, which is set to challenge conventional norms set by society over ages, and signals the advent of modest dressing. The level of success achieved by designers such as Elie Saab, ZuhairMurad and Rami Al Ali, is testimony of their rich culture, talent and innovative skill sets. It’s about time to give greater emphasis on nurturing and developing younger designers. n

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FIRST TIME EVER

Be at the very centre of the Fashion Supply Chain

PURE ORIGIN Uniting manufacturers and buyers in London’s busiest fashion trade hub

22-24 July, 2018 | Olympia London Pure Origin allows buyers, designers and retailers to meet with manufacturers and suppliers from all over the world under one roof at London Olympia. It connects you to the right people and gives you the opportunity to network with industry experts.

Key brands and retailers include: Burberry, Dior, Giorgio Armani, Harvey Nichols, Marks & Spencer and Debenhams.

Book Your Space Now : Mr. K S Bisht, Jt. Director (Fairs & Exhibition) Apparel Export Promotion Council Apparel House, Institutional Area, Sector - 44, Gurgaon-122003, Haryana, (India) Tel: +91 124 2708156(D), 2708000-003, Fax: +91 1242708004 Mobile: +91 9810527747, Email : kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section) Limited Stalls available on First Come First Serve Basis

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APPAREL / COVER STORY

JAPAN An Important Market for India

Indo-Japanese trade relations go a long way. And to strengthen it further both governments signed a MoU. This is expected to further enhance the scope of textile and apparel sector. Of course, Indian exporters have to work hard to match up to Japan’s quality standards. In the long run the MoU will open a new chapter in bilateral trade.

R

ecent OECD data reveals, Japan’s exports have rebounded since mid2016, resulting in a spurt of investments. However, wage growth remains slow despite a decline in unemployment rate to below 3 per cent.

Another research by Deloitte points out the Japanese economy has seen significant growth

rebound in the past year, largely fuelled by an acceleration in exports, which in turn was helped by the insulated effect of a weak yen and an increase in global growth. Moreover, improvement in export performance is boosting investment.

In January 2018, Japanese exports were up 12.2 per cent compared to a year earlier, registering 14th consecutive month of exports growth. There was especially strong growth in the exports of machinery, chemicals, and non-ferrous metals.

Exports to China were up 30.8 per cent, to the US 1.2 per cent,

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APPAREL / COVER STORY

21 per cent to Germany, 35 per cent to the UK, 7.6 per cent to South Korea, 9.8 per cent to Taiwan, 21.9 per cent to Vietnam, and 23.5 per cent to Indonesia. Further, industrial production went up 2.7 per cent in January compared to the same period last year.

JAPAN-INDIA TEXTILE TRADE

its 1 per cent share in India’s total textile and apparel exports despite the fact that India has duty free access to Japan under CEPA. From the total $373 million worth of textile and apparel exports to Japan, 49 per cent was apparel; followed by yarn and home textiles with a share of 19 and 15 per cent, respectively.

The top five commodities exported to Japan include: woven women’s trousers/dresses/ blouses/shirts, cotton and wool yarn and track suits & swimwear. Stats reveal Japan’s overall textile and apparel import decreased at a CAGR of -4 per cent from $42 bn in 2012 to $35 bn in 2016.

India imported textile and apparel products worth $123 million from Japan in 2016, again a constant figure in the last five years. Import was dominated by filament, which occupied 50 per cent share. All top five exported categories were synthetic. The reason for low exports to Japan is lack of awareness about Japanese textile quality requirements among Indian textile manufactures.

Meanwhile, India’s textile and clothing industry is looking to push up exports to Japan. In line with this, the Indian government is helping textile trade and industry to better understand Japan’s culture. The aim is to meet Japanese quality standards in order to boost exports. The Indian government has signed a MoU with Japan Textile Products Quality and Technology Centre (QTEC) to establish and encourage quality compliance activities jointly and organise collaborative ‘Industry Capacity Building Programme’.

As Subrata Gupta, Joint Secretary, Ministry of Textiles, said recently India’s manufacturing capacity is enormous but exports to Japan are minimal in textiles. By changing mindset, companies can match up to Japanese quality requirements and enhance the quantum of textiles exports. On similar lines, Ajit B Chavan, Secretary, Textiles Committee points out India is a CASHING IN ON EACH major global textile economy with textile exports worth $40 OTHERS’ STRENGTHS billion. India ranks 4th and 5th among the top 10 textiles and Japan has leverage in infrastructure, clothing exporting countries. Our top exports destinations are: machinery and quality and testing systems Europe and the US with total exports touching $16.78 billion in for textile. The Japanese industry is 2016. Japan, on the other Table: T&A Exports from India to Japan (US$ million) hand, is a major textile

2012 2013 2014 2015 2016 CAGR India’s share importing country with

(%) in Japan 97 per cent of its textiles

total Imports being sourced from China

(2016) (%) (62.11 per cent), Vietnam Fibre 6 6 6 5 6 2 1 (10.56 per cent), Indonesia Filament 3 5 13 12 12 39 2 (4.12 per cent) and Yarn 64 78 78 72 71 3 11 Bangladesh (2.76 per cent).

Fabric 19 29 26 22 26 9 2 While India’s exports to Garments 222 229 211 184 183 -5 1 Japan were a mere $429.4 Home Textiles 61 76 72 58 56 -2 3 million, which is 1.24 per Others 24 23 18 18 17 -8 1 cent share.

Since the last five Total 399 445 423 371 373 -2 1 years, Japan has sustained Data Source: UN Comtrade and Wazir Analysis

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APPAREL / COVER STORY technologically advanced and derives its strength from synthetic segment. Both consumers and industry are equally quality conscious. Moreover most domestic and imported products are subjected to testing and can’t be sold in Japan without certification of compliance with prescribed standards.

The Indian textile trade and industry needs assistance for better understanding the quality culture in Japan particularly in apparels.

India has abundance of raw materials and labour force for the production of quality textile and apparels. The products and export of textile from India is also huge and enjoys competitive advantage in different export destinations of the world. The Textile Committee therefore, can provide a platform and expertise for strengthening current quality

and compliance procedures in India. With a view to equip the industry for adoption of quality standards as required by Japanese industry, various capacity building programmes are being organised in collaboration with QTEC all over the country.

BILATERAL TRADE PACT The Comprehensive Economic Partnership Agreement (CEPA) signed by India and Japan in February 2011 and implemented from August 2011 was expected to boost bilateral trade in goods and services. However, India’s merchandise exports started contracting in four out of five years between 2012-13 and 2016-17. As a result, India’s trade deficit with Japan has now widened to $5.9 billion against $2.7 billion in 2013-14. In 2016-17, India’s exports to Japan contracted 17.5 per cent, and its imports fell by 1 per cent.

Commerce ministry data for the period 2009-10 to 2013-14 indicates preferential imports under the CEPA still form a small proportion of total imports. In 2013-14, it stood at 22.4 per cent

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APPAREL / COVER STORY

of total imports under the India-Japan CEPA. “The negative or slow growth in trade with Japan is a matter of concern for India, in view of the fact that there is high potential for faster progress on goods and services trade,” the Indian embassy in Tokyo says on its website.

Even the foreign trade policy statement 2015-20 released by the Commerce Ministry refers to non-tariff barriers faced by Indian exporters. “While on one hand, the Japanese market has not seen growth in the product areas of India’s interest, Indian business entities are facing problems in market access. These problems can be briefly said to be arising out of language constraints faced by Indian companies in Japan, highly demanding product and service standards, regulations that require business modalities making market access a costly venture, and a relative lack of intensive effort on the part of Indian business,” it said. “The other route of access of India’s export sectors into Japan will require language proficiency, negotiating a simplified framework for market access and continuous trade promotion efforts on the part of businesses and the government,” it added.

INDIA’S IMPORT-EXPORT BASKET India’s primary exports to Japan are: petroleum products, chemical elements, fish and fish preparation, non-metallic mineral ware, metalliferous ores and scrap, clothing and accessories, iron and steel products, textile yarn/fabrics, machinery, feeding-stuff for animals. While primary imports from Japan are: machinery, iron and steel products, electrical machinery, transport equipment, chemical elements, plastic materials, manufactures of metals, precision instruments,

India’s textile and clothing industry is looking to push up exports to Japan. In line with this, the Indian government is helping textile trade and industry to better understand Japan’s culture. The aim is to meet Japanese quality standards in order to boost exports.

rubber manufactured, coal and briquettes.

Bilateral trade in services between India and Japan also remains subdued. India’s exports of IT and IT enabled services to Japan account for less than 1 per cent of Japan’s IT services market and India also has an overall trade deficit in services with Japan unlike the surplus position it has with many developed countries. “The CEPA sub-committee on services could take up several implementation issues including those relating to expeditious issue of visas for IT and other service providers, clarification of ‘technology services’ in the bilateral double taxation agreement, regulatory issues relating to financial services, particularly insurance and progress on the built-in agenda in CEPA including in respect of nurses and healthcare workers and mutual recognition agreements among professional bodies,” says a study by India-Japan trade published by Research and Information System for developing countries.

As Professor Pravakar Sahoo, of the

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APPAREL / COVER STORY Table: Institute of Economic Growth points out, CEPA has been a failure when it came to boosting India’s exports to Japan. Since Fiber tariff lines of Japan were Filament already close to zero, it Yarn is India who gave more Fabric market access to Japan Garments through significant tariff Home textiles cuts. However, Japan has very strict quality controls Others and Indian exporters need Total to comply with those regulations to increase exports to this lucrative market.

The commerce ministry plans to run special programmes for trade promotion in Japan in identified sectors like textiles,

India’s T&A Imports from Japan (US$ million) 2012

2013

2014

2015

2016

CAGR Japan’s share (%) in India total Imports (2016) (%)

19

19

27

25

21

2

1

69

76

82

71

62

-3

11

1.2

0.7

0.5

0.3

1.3

3

0.4

21

14

14

13

14

-10

1

2.3

0.3

0.3

0.3

0.3

-39

0.1

0.5

0.8

1.1

2.1

2

46

1

8

18

18

16

23

29

4

122

129

143

127

123

0.2

2

Data Source: UN Comtrade and Wazir Analysis

garments, information technology services, pharmaceuticals, leather products and agro-processed products, according to the FTP statement. Biswajit Dhar, Professor of economics, Jawaharlal Nehru University, feels India should look at higher investment from Japanese companies along the Delhi Mumbai Industrial Corridor. Building of the DMIC which has been languishing for years needs to be fast-tracked. Industries along the corridor could help us boost investment led exports.

FUTURE POSSIBILITIES Deloitte analysis highlights that Japan is working with other Pacific Rim nations to revive the Trans-Pacific Partnership (TPP), the free trade agreement from which the United States withdrew a year ago. Japan was keen on the original TPP not only because of the trade liberalisation that it entailed but also because it was likely to provide the government with the political cover needed to impose controversial structural reforms. In addition, the TPP is often seen as a counterweight to China’s plans for a regional free trade agreement. The new plan is for a smaller TPP involving the original 11 nations other than the United States. Additionally, there are many more policy reforms in place to transform the foreign trade dynamics with other countries.

The message of Masanao Kambara, President, Japan Textile Federation is clear, “Now is the time for the Japanese textile industry to disseminate the products that can demonstrate our technical strength and design capability to the markets and to

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APPAREL / COVER STORY

Table: Top 5 T&A Commodities Imported from Japan (US$ million) Rank

HS-4

Description

1

5403

Artificial filament yarn

2

5603

3

Japan’s share 2012 2013 2014 2015 2016 CAGR in India’s total (%) imports (2016) (%) 61

68

71

Nonwovens

4

10

10

5502

Filament tow

3

3

4

5402

Synthetic filament yarn

6

5

5503

Synthetic staple fiber

11

62

53

-3

48

11

16

41

8

7

10

10

35

20

7

9

7

7

4

2

11

13

8

6

-14

4

Data Source: UN Comtrade and Wazir Analysis

Table 2: Top 5 T&A Commodities Exported to Japan (US$ million) Rank

HS-4 Description

India’s share in 2012 2013 2014 2015 2016 CAGR Japan’s total (%) imports (2016) (%)

1

6204 Woven women’s trou- sers/dresses 66

61

52

2

5205 Cotton yarn

43

57

58

3

6206 Woven women’s blouses/ shirts

52

49

4

5107 Yarn of combed wool

9

5

6211 Track suits and swimwear

21

47

45

-9

1

44

43

0

19

46

38

38

-8

3

8

7

16

18

20

17

17

14

15

18

-5

2

Data Source: UN Comtrade and Wazir Analysis

push forward the creation of new values. We will continue to press the government to conclude the Japan-EU EPA and TPP 11 for putting such trade agreements into effect as early as possible, and to strive to finalize the negotiations for widearea economic partnerships including the FTA between Japan, China and South Korea, RCEP and others that contain favorable provisions for further development of textile industries.”

Kambara goes on to say JTF is making efforts to address environmental and safety issues with the growing awareness of consumers on sustainability including environmental and safety issues. It also aims to strengthen information transmission capability and brand power. Under the guidance of the Ministry of Economy, Trade and Industry, it will cooperate in and proceed with ‘J ∞ QUALITY Product Certification Project’ managed

by Japan Fashion Industry Council in collaboration with the Cool Japan projects including those related to textile products for penetration among overseas consumers. While challenges prevail, the country’s most active & successful Prime Minister Shinzo Abe is set to catapult the trade wave in its favour. As he

says “For future growth, for future generations, and for a future Japan that is robust. I will break down any and all walls looming ahead of the Japanese economy and map out a new trajectory for growth. This is precisely the mission of Abenomics.” n

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APPAREL / TRADE TREATIES

India’s FTAs need to be reworked

I

ndia needs to rethink its trade agreements. The FTA with the European Union has not taken the country far and exports are not rising. On the other hand, Indian imports from countries like Bangladesh are rising and eating into the share of domestic manufacturers because of South Asian Free Trade Area (SAFTA).

This is a trade agreement that came into force in 2006 between India, Pakistan, Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka.

Other major areas that need to be worked upon include a change in traditional mindset. New practices for sustained growth have to be adopted, creating economies of scale, inviting foreign investment and focusing on research and development. The workforce has to be skilled. Competitive products have to be created. Processing is another segment where huge capacities need to be generated and quality improved.

India vacillates on RCEP

J

apan, Korea and China are working on the Regional Comprehensive Economic Partnership (RCEP). India is the only major economy seemingly distant from the idea of getting RCEP over the line.

A reluctant participant from the beginning, India finds its own interests are almost entirely at a variance with those of the principal proponents of RCEP. When most countries spoke of undertaking trade liberalization in both agricultural and industrial products, India drew its own divergent line in tariff negotiations. India’s major concern was the presence of China. India was therefore, reluctant to offer lower tariffs on too many goods to its northern neighbor. The concern was not without basis: even without preferential tariffs, India’s imports from China increased nearly 11-fold between 2004-05 and 2017-18.

During the same period, the increase in India’s exports to

There is a need to create an end-to-end value chain in the textile sector. Ahmedabad and Surat are major centers for producing cotton and manmade fibers and fabrics, aimed predominantly at the low-value domestic market. Gujarat is the largest producer of cotton and manmade fibers.

Low-value products like cotton and fabrics are being exported from the state while high-value products like apparels are being imported. n

China was relatively modest, resulting in a steep increase in the trade deficit with China.

Adding to this is India’s not-too-happy experience implementing the three FTAs with Asean, Japan and Korea. India had agreed to eliminate tariffs on about 80

per cent of its products in each of these agreements and the outcome was quite similar—consistently rising trade deficits.

While India lowered its tariffs to allow easier market access to its partner countries, Indian entities were unable to secure enhanced market access using the lower tariffs offered by the FTA partners. n

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APPAREL / GUEST COLUMN

Rupee

on its way to 70

ABHISHEK GOENKA, CEO, IFA Global

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he Dollar-Rupee has maintained its extreme momentum on the upside as suggested in report dated 23rd April, 2018: “USDINR trend reversed - Headed towards 67.50-68 levels”, where we had identified a major trend breakout on account of worsening Indian fundamentals and pointed that Rupee may hit 67.50 to 68 levels by June 2018 (When spot was at 66.20). This note is a follow up mail on where the rupee is headed next.

The important developments haunting global markets is unwinding of carry trade across Emerging Markets, the US yields are

already inching close to 3.06% amid higher debt supply and higher crudeoil prices. This issignalling reverse carry trade and money flowing in US back. The dollar internationally has clearly broken the downtrend and now the index is trading at 5-month high. It is quite high possibility that we see Euro at 1.12 and GBP sub 1.28 levels soon. Furthermore, Rate hikes in US is very much on the cards with 3 hikes(June, Sep and Dec as per fed fund tool) this year, could shift the entire carry towards US back.

Let us not ignore the carry that has done across world markets over last 10 years and zero interest rates regime in developed markets. RBI is practically slow in intervention and possibility of Rupee hitting 70 soon is increasing. Refer our report dated on 30th April, 2018: “Rupee heading towards the elusive 70 mark? Macros and technicals suggest it could”.

Nifty valuations looks bloated and may soon follow the fate of rupee, a 5 to 10 percent fall may be quite possible for Nifty once important supports are broken.

We strongly recommend exporters to enter into options, by buying ATM Put options- only for those who are building excess position, so one can participate in entire weakness. The current levels looks very lucrative but may be after one year 68-70 also may not sound great if the momentum of dollar strengthens further and RBI maintains interest rates at par. Remember the days when Rupee fell from 39 to 52 during 2008-2009 and 55 to 68.50 in 2013. Calculate them in terms of percentage and the numbers may run in the 70’s. Importers close their eyes and book forwards or through options. Avoid low cost call sell or Seagull structure. n The author is Founder & CEO, IFA Global

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ASEAN’s growing importance and

gains for member countries

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he Association of Southeast Asian Nations or ASEAN as its popularly known took shape on August 8, 1967. The association comprising Indonesia, Philippines, Malaysia, Singapore, and Thailand has now expanded to Cambodia, Lao PDR, Brunei Darussalam, Myanmar, and Vietnam. The intent of the association formed between 10 Southeast Asian countries was to promote inter-country trade, governmental cooperation, and economic, political and socio-cultural integration of the member

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countries, and globally. Additionally, it also aims to protect member states’ regional stability and instill peace amongst them in times of conflict resolution. In 2015, ASEAN organization’s nominal GDP (combined) was around $2.8 trillion, making it a global powerhouse. ASEAN shares its physical borders with major apparel trade players like India, China, and Bangladesh.

It has been the foundation of several establishments like East Asia Summit, EAS, and Regional Comprehensive Economic Partnership, RCEP (FTA between ASEAN, Australia, China, Japan, South Korea, New Zealand and India).

FREE TRADE AGREEMENTS Free Trade Agreements within ASEAN countries are led by the ASEAN Trade in Goods Agreement (ATIGA) and the Agreement on Customs. The ASEAN Free Trade Area (AFTA) is a trade bloc agreement, which launched the Common Effective Preferential Tariff Scheme (CEPT). CEPT states tariff will be reduced to 0-5 per cent, on the goods being traded within ASEAN region, if the goods meet a 40 per cent ASEAN content requirement. Apart from the establishment of AFTA within the member states, ASEAN trade bloc has also signed various free trade agreements with major Asia-Pacific economies, such as ASEAN-China FTA (ACFTA), ASEANAustralia-New Zealand FTA (AANZFTA), ASEAN-Korea FTA (AKFTA), ASEAN-India FTA (AIFTA), and ASEANJapan Comprehensive Economic Partnership (AJCEP). These FTAs encourage and promote businesses in the ASEAN trade bloc, irrespective of their size, by enabling regional and international trade without any tariff barriers. They also offer businesses an easy access to the new export markets with simplified import and export.

A COMPETITIVE EDGE ASEAN countries do not face a high degree of competition for consumer and finished products, and product diversification has enabled ASEAN economies to aggressively export to the global textile and apparel market. The process of trade

liberalization through AFTA, various FTAs and the ASEAN Economic Community’s creation in 2015, has not only led to tariff reduction and elimination but also in integration and elimination of the non-tariff barriers that ASEAN players face in the industry. With this advantage, exports value of ASEAN5 including Malaysia, Thailand, Indonesia, Philippines and Vietnam nearly tripled from $24.4 billion in 2001 to $71.8 billion in 2014. The biggest gainer has been Vietnam with a 10-fold increase in apparel and textile exports value in the same time period.

Besides the ASEAN advantage, Vietnam joining the World Trade Organization (WTO), 2007 was also an additional factor that allowed the country to export to larger markets without tariff barriers.

ASEAN-INDIA TIES GIVE TRADE A BOOST In 2010, India achieved a milestone to expand its economic and political relationship with its neighbors, through the ASEANIndia FTA (AIFTA). This agreement resulted in duty liberalisation between India and ASEAN countries to enhance bilateral trade. Under AIFTA, each trading partner can keep some products out of the agreements, till the time they amount to less than five per cent of bilateral traded imports. This FTA can trigger a positive trade between India and ASEAN countries. The agreement set tariff liberalisation on over 90 per cent products traded between India and ASEAN. Additionally, AIFTA can also bring in investments from ASEAN textile manufacturers in the Indian manufacturing sector, catering both to the country’s domestic and export markets. n

ASSOCIATION OF SOUTHEAST ASIAN NATIONS

Brunei Darussalam

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Cambodia

Indonesia

Lao PDR

Malaysia

Myanmar

Philippines

Singapore

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APPAREL / TRENDS

Luxury brands become sportier

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ncreasingly more and more luxury brands are taking style inspiration from street wear and incorporating sportier and casual urban aesthetics into their designs. They are forging exclusive design and marketing collaborations with street wear labels, hip-hop and rap recording artists, entertainers, and fashion and

social media influencers.

Luxury fashion houses are partnering street wear brands and introducing sneaker-

and street wear-inspired products. For example, Louis Vuitton partnered skateboard brand Supreme on a design collaboration. The collection, which was sold in pop-up stores in major cities worldwide in June 2017, included T-shirts, hoodies and bags emblazoned with Supreme’s white logo on bright red Louis Vuitton patterns.

Luxury brands are adapting to changing times and striving to connect with a younger and diverse customer base, grooming the next generation of loyal luxury customers. The historically conservative luxury goods industry is striving to attract a more diverse and younger client base. Luxury goods companies will increasingly need to innovate and keep up with millennial and Gen Z trends in order to capture and grow sales among the younger generations. n

Fitness trends fuel brand growth in China

S

ports and exercise are taking off in China, driven by a combination of health and social factors, and opening up new opportunities for brands to connect with consumers. People are looking beyond traditional sports like badminton and table-tennis and embracing a whole range of new activities from climbing to fishing.

Brands can look to leverage opportunities in these spaces – especially where no other brands occupy – catering and curating

relevant experiences to strengthen associations.

Sports apparel dominates sponsorship awareness (62 per cent against all categories), with closer associated categories such as beverages (eight per cent) and automotive (eight per cent) and alcohol (two per cent) falling a distance behind.

Also, there are opportunities for non-endemic brands to build associations with sport. These will have to consider carefully how best to authentically link the brand in particular sporting context. Given that the elevation of personal well-being and status is a key driver of sporting take-up, brands need to think through selection and leveraging of athletes that cater to this. Brands need to focus on highlight key areas to personal benefit when associating with specific sports. A brand like Maia Active markets its products aesthetically, explaining how they are specially designed for Asian bodies and will make the user look good.n

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Fast Fashion companies using data analytics: McKinsey study

A

McKinsey survey conducted with Women’s Wear Daily reveals, top fashion companies are using data analytics and consumer insights to develop concepts and plan lines. These companies can deliver a product to market in less than six to eight weeks. They have adopted a more sophisticated model based on understanding of

what the consumer wants. This model allows them to incorporate what has been selling and respond quickly to what is generating early sales.

As companies often complain they are stuffed with data but starved for insights, they can now analyse consumer research and explore which topics are trending on major search engines and track search rankings on peers’ websites.

Retailers can use advanced visual recognition tools to identify styles and colors trending on socialmedia. Aggregate product ratings by attribute, price, and style — either from the merchant’s own site or from retailers’ sites—can provide insight into what is trending with a specific type of consumer.n

Digital transformation in leading fashion industry

T

he fashion industry, ranging from global discount retailers to exclusive luxury brands, drives a significant part of the global economy. Fashion being the most challenging fields, is highly impacted by global economic uncertainty as well as distinct trends and industrial changes. In response to the pressure for growth and cost efficiency, many brands have started a series of initiatives to improve their speed

to market and implement sustainable innovation in their core product design, manufacturing and supply chain processes.

Lectra, the technological partner for companies using fabrics and leather, put theory into practice at its recent fashion event by unveiling their latest 4.0 cutting room to more than 100 privileged industry professionals.

To examine the real-life application of digitalization in fashion ‘Fashion Goes Digital’ drew industry stakeholders and market experts from 20 countries, who gathered at Lectra’s International Advanced Technology Center (IATC) in Bordeaux-Cestas, France.

Lectra’s Cutting Room 4.0 is an embodiment of Lectra’s commitment to empowering customers with the best solutions to thrive in new digital era. This avant-garde technology leverages industry 4.0 principles to provide greater agility, throughput, cost efficiency and scalability in order to respond seamlessly to small batch orders and shorter lead times. n

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Demand mapping gets easy with artificial intelligence

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lowly but surely, Artificial Intelligence (AI) is seeping deep into the textile industry production cycles. Till date, several attempts have been made to quantify something as abstract as fashion but all were in vain. Thanks to the fast changing technology landscape, things are finally able to quantify the complexities of abstracts, such as fashion.

And as Ambud Sharma, Founder, Escaro Royale Luxury points out, AI is now helping not only merchandising decisions but also in fine-tuning the supply chain and creating customised and personalised fashion trends.

The typical variables include colors, patterns, designs and geographic tastes in materials. With access to more data and insights, designers can now take help from the AI platforms to produce accordingly. This saves time and money that was earlier wasted in experimentation. The designers can now be more confident in the sales potential of their merchandise.

CONSUMER INSIGHTS It is important to know your customer, and even more important to know their buying and spending behavior. There are thousands of digital footprints that we leave behind each day when we engage over the Internet – be it reading an article,

FASHION FORECASTING With exponential increase in data and events pertaining to fashion each season, it is impossible to collate and correlate all statistics to understand future trends. AI systems are now being utilised to correlate worldwide data to forecast trends on what merchandise needs to be produced and in what quantity.

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INVENTORY MANAGEMENT

reviewing a product or signing up for an event. These footprints are a goldmine for the fashion industry – since it helps in identifying the digital persona of a person in the AI world.

Using this info, it is possible to accurately map a person’s digital persona to their potential interests. This is especially amplified when an AI system knows what a person bought and when, thus projecting and reinforcing a potential consumer’s interest in a fashion product through targeted advertising. The power of consumer insights allows in gauging market size, thereby helping brands in ascertaining the quantities to be produced.

RETAIL INTELLIGENCE Retail is complex but can be handled seamlessly using AI. A consumer’s retail interaction, be it in a showroom or on a website is extremely important and hear-worthy. The feedback received in real-time from consumers can be extrapolated to ascertain whether demand is being sufficed and if the consumer is looking for something that isn’t available. Also, real-time digital feedback mechanisms can quantify customer satisfaction, thereby assisting in customer retention. This feedback, if correlated correctly, can be used as a guiding tool for future merchandising and retail dominance. Though this can be done manually, it can be done faster, better, cheaper and more accurately by using the processing capability of an AI platform.

There is nothing more frustrating than having inventory that doesn’t sell and not having inventory that sells well. This is where AI-based inventory management systems come to the rescue. These systems understand the velocity of sales, many times global sales, and provide insights into what is selling and how fast. More importantly, they help in providing recommendations on inventory optimisation across markets to ensure that the right product is available in the right market.

For sized products, like shoes and apparels, these intelligent platforms provide marketwise recommendation in sizing to ensure that the correct set of sizes are available in applicable markets.

In all, something as abstract as fashion can be more-or-less quantified using AI to the point that it may very well one day be able to

CONSUMER INTERACTION AND ENGAGEMENT AI-based chat-bots are now being used to seamlessly interact with consumers. These chat-bots learn skills over time by interacting with various sets of customers and they are able to handle most questions and concerns on their own not to mention that they don’t change shifts or get tired like their human counterparts, leading to higher consumer satisfaction.

Additionally, the information collected through chat-bots is regularly analysed and correlated by AI central commands for deeper insights about consumer base. Customised and automated messaging systems can keep the consumers abreast with the latest offerings of a fashion brand, thereby keeping the customers engaged through the information that is unique and customised to his/her taste.

make automated design and product decisions for current and future trends. For fashion brands, the potential of AI taking over these day to day decisions is very high and will only increase with time. As digital transactions and interactions increase, and more and more data are produced, brands can only look up to powerful AI platforms with humongous datacrunching capacities to assist them to navigate complex digital waters. n

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APPAREL / CIRCULAR ECONOMY

Making Fashion Circular

6

th Copenhagen Fashion Summit, held over two days May 15 and 16, 2018 in Copenhagen, discussed innovative industry solutions and ecological and social challenges and stressed on making fashion green . The event, organised by the Global Fashion Agenda, was supported by top stakeholders in the global fashion industry including H&M, Nice, C&A and Li &Fung with representatives from unions, associations and other institutions, as well as founders of much smaller brands marking their presence.

AN ECO-FRIENDLY APPROACH TO FASHION Numerous speeches and discussions enabled audiences to gain valuable perspective and insight on issues related to sustainability and more. Eco-pioneer Stella McCartney spoke about her own journey towards developing an eco-friendly approach,

emphasising the lack of support from the rest of the industry.

Entrepreneur and academician David Roberts explained technologies do not disappear but are replaced. Like in the case of oil, competition from solar and wind power could well herald a decline in usage of this resource. “It’s good news. But what’s less good news for you is that the textile industry will soon be the most polluting industry in the world, because at the moment you don’t have solar power. “ Ellen MacArthur’s ‘Make Fashion Circular’ initiative, which aims to establish practices that would develop a truly circular economy in the fashion industry, is attracting an increasing number of brands and manufacturers. The sailor’s determination has helped her get more than 50 brands on board, including important ones like Burberry, Nike and H&M. She goes on to say that the biggest players in the plastic industry have worked together to find a solution for packaging. That helped with regulation.

TOWARDS AUTOMISATION Progress in automation and IT systems have allowed the industry to develop faster solutions which better meet the expectations of final consumers, while also reducing

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unsold merchandise. Pete Santora of Sofwear Automation has developed a machine which optimises the processes of cutting, sewing and assembling apparel and footwear. He plans to develop local distribution circuits with factories that are geographically close to their customers.

ADOPTING RESPONSIBLE STRATEGIES Responsible business strategies are also being developed in China, where consumers are increasingly confronted with problems linked to pollution. As Robby Gu, Vice PresidentInnovation, JNBY Group points out developing responsable collections is not only about social engagement: it’s an economic benefit for them. He said they came up against the problem of other companies copying their products. But by developing responsible sourcing and using quality materials, they ensured customers can tell the difference because of the feel and smell of the brand’s products.

This is one of the central ideas of the summit. All speakers admitted that adopting a responsible approach can imply costs and that it is often complicated for small or medium-sized businesses to know how to get started. But in the mid to long term, these commitments pay off, with 1-2 per cent growth in EBIT margin predicted for companies that make them.

Marie-Claire Daveu, Chief Sustainability Officer, Kering observed during a panel discussing the #Metoo movement

and its impact on the industry, “When I think about the road we’ve travelled since last September in terms of protecting models during Fashion Weeks, it’s impressive.” She goes on to say, “There are very few issues to which LVMH and Kering will both put their names to. But when it’s about a subject of that scale, the change is radical.” Now it’s up to the industry to show that this kind of drastic change can also happen in environmental and social issues. n

Ellen MacArthur’s ‘Make Fashion Circular’ initiative, which aims to establish practices that would develop a truly circular economy in the fashion industry, is attracting an increasing number of brands and manufacturers. The sailor’s determination has helped her get more than 50 brands on board, including important ones like Burberry, Nike and H&M.

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APPAREL / EVENTS

Smt V. Sathyabama, Member of Parliament, Tirupur inaugurating the 45th IIKF

45th India International Knit fair held in Tirupur

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he 45th edition of India International Knit Fair featuring all seasonsorganized by Apparel Export Promotion Council in collaboration with Tirupur Exporters’ Association under the banner of India Knit Fair Association at IKFA Complex, Tirupur.

The fair was inaugurated by SmtV. Sathyabama, Member of Parliament, Tirupur Constituency and Shri HKL Magu, Chairman, AEPC, in the presence of Shri. RakeshVaid, Sr. Vice Chairman, ATDC, Dr.A.Sakthivel, Chairman, India Knit Fair Association, Exhibitors, Trade Members, and Overseas Buyers.

Smt. V. Sathyabama, Member of Parliament, in her address mentioned that Tirupuris always ahead because of their innovation and hard work. Post implementation of GST though the industry

faced a lot of issues, knitwear manufactures have taken steps to ensure that there is good business thus making Tirupur a role model for other cities. Further she emphasised that the issues related to impact of GST has been discussed with the Cabinet Ministers and is expected to fetch a solution at the earliest to benefit the Knitwear Industry.

Shri HKL Magu,Chairman AEPC, in his address stated that there is a 15% decline in exports from Tirupur. It was a good effort of the government in consolidating various taxes and introducing GST. But implementation of the same is not properly being handled. Putting together duty drawback, state levies and MEIS a total of 13% of benefit was given to Exporters earlier. Now, the same has come down to 7.7%. Even though WTO discourages in offering grants, it is happy to learn that government will give away 4%relief under MEIS even after the forthcoming June month. In the opening month of this Financial Year, the value of apparel exports was Rs 8,859.67 crores as against its corresponding value of Rs 11,272.24 crores which is 21 percent down from the previous year. Hence, the government should extend their support to the industry

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Chairman AEPC Mr. HKL Magu addressing the 45th IIKF

Padma Shri Dr. A Sakthivel, Vice Chairman, AEPC lighting the inaugural lamp during the 45th IIKF inauguration held in Tirupur.

so as to recover from the downward trend / sluggishness. In this situation, India International Knit Fair (IIKF) will bring renaissance in business thereby fetching more orders in future to the participating exporters.

Dr.A.Sakthivel, Chairman- India Knit Fair Association during his briefing, pointed out that the current exports of Tirupur is Rs 23 thousand crores thereby suffering a decline of 15%, which is an all time low in past 33 years. He said that decrease in Duty Drawback and imposing of State Levies are the factors affecting this decline. It will be helpful to the Exporters if the difference of 2% to 3% paid under embedded taxes to Central and State Governments are to be reimbursed.

For this, we are pursuing through AEPC. In order toboost the Apparel Exports from India we are now encouraging the Garment Exporters to explore new marketssuch as South America, Japan and Middle East among few other new markets.

Similarly, product diversification is being promoted so that apparel exporters can penetrate niche markets across the globe.

PROFILE OF EXHIBITS An array of apparel categories for the season was showcased by the exhibitors which include men’s, women’s and children’s wear. In this fair lot of All Seasons Apparel collections were displayed. The garments made with 100% Cotton, 100% Polyester and 100% Modal Linen, Poly Cotton Blends, Organic Cotton, etc were showcased by the Exhibitors.

Cold Pigment Dyed Garments, Mercerized, Burnt-out Styles, Warp Knit Fabrics, Stone wash, Anti-microbial finish,

from left: Mr. Rakesh Vaid, Senior Vice Chairman ATDC, Smt V. Sathyabama, Member of Parliament, Tirupur, Chairman AEPC Mr. HKL Magu and Padma Shri Dr. A Sakthivel, Vice Chairman, AEPC during the 45th IIKF

Moisture Management Finish, etc were also noticed as Special Finished Apparels.

Exclusively for kids wear, separate stalls were setup and garments were exhibited by the garment exporters.

A total number of 40 leading Exporters from Tirupur, Coimbatore, Hooghly, Chennai, Mumbai, New Delhi, Gurgaon, had put up their stalls in the fair. During the three days of fair, a total footfall of 33 buyers from different countries and 147 buying houses / agents have visited the fair. Most of the buying houses/ agents who have visited this fairrepresenting their major buyers and brands have sourced for their requirements.

The three day event attracted new Buyers from countries namely Saudi Arabia, Uganda, Turkey, Mexico,USA, Poland, Serbia, Japan, Portugal, Canada, UAE, Columbia, Spain, UK, Germany, Thailand, etc. Teams of buyers from Japan are impressed with the display of garments and have expressed to have a long business association.

The participants have reported that they could get good business enquires from the overseas buyers and buying agents and the expected business deal is around Rs. 325 crores. n

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APPAREL / AEPC EVENTS

Mr. HklMagu, Chairman Aepc India welcoming Dr. Anchita Pandoh, Deputy Commissioner, New Custom House, Delhi

Mr. HklMagu, Chairman Aepc India welcoming Mr Ashutosh Kumar, Principle Partner M/s JurisperitusLex LLP.

AEO seminar conducted in Gurugram, Mumbai and Bengaluru AEPC India organised a seminar on Authorised Economic Operator (AEO) Program at Gurugram. Dr Anchita Pandoh, Deputy Commissioner, New Custom House, Delhi and Ashutosh Kumar, Principal Partner Jurisperitus Lex attended the program.

I

n his address, Chairman AEPC, Mr. HKL Magu said that the apparel sector is at an important cross road today. “On one hand we are seeing increasing opportunities with the predominant player, China, vacating some top apparel categories, where India can increase its exports. On the other hand, the industry is grappling with some competitiveness issues, due to blockages in claims and refunds. I am aware of the struggle that some of our exporters are going through, because of the working capital blockages. The Council has been taking up the issues constantly, and I can assure you that in the next few months the processes will be more streamlined.

“However, the bigger issue is of taking the opportunities available to us. India has been stagnating for the last few years, with exports

hovering around USD 18 bn, while our competitors have nearly doubled that. The way forward is to adopt better systems and practices that can lead to long term growth and competitiveness of this sector. In this context today’s AEO program is very relevant as this program aims to align Indian exports with the World Custom Organisations (WCO) Safe - Framework for Standards, to enhance international supply chain security through validated and robust systems. I look forward to hearing more about the scheme and its benefits today,” added Mr. Magu.

Mr. Magu further said that “an important development which I should share with you is that Indian export schemes are under review as India has acquired export competitiveness in the textiles and apparel sector by crossing the threshold of 3.25 percent share of global exports in 2010. This calls for a change in our strategies for support and capacity building of this sector. Although AEPC is conducting a study to formulate alternative schemes, but schemes like AEO program can play an important role in incentivising exporters with better systems and facilities, and thus earmarking some customized schemes

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Participants during the AEO seminar in Mumbai

for such players. AEPC is working with experts for formulating such schemes, and your suggestions are also welcome in this regard.”

In Mumbai Authorized Economic Operator (AEO) Program was organized in partnership with office of the Commissioner Of Customs. Mr. Ravi Kumar – Asst.

Dr. Anchita Pandoh, Deputy Commissioner, New Custom House, Delhi addressing the seminar

AEO seminar in Bengaluru

Commissioner - AEO cell, Mumbai Custom, gave the power point presentation on Authorized Economic Operator. Mr. Ravi Kumar said that the Indian AEO Program is a game-changer.

“It will not only achieve Make in India but will also substantially add to the vision and lead India to become a manufacturing and exporting power-house. Indian Customs is fully committed to make this vision a reality by playing its mandated role in India’s growth story through its AEO initiative.”

Mr. Gautam Chopra from Jurisperitus has given the presentation on GST – Refund, mismatching of invoices etc He informed that main reason for refund are not coming is mostly due the mismatching of invoices.

Hence extra care must be taken while punching the entries.

In Bengaluru, Mr. Sunil K Sinha, Commissioner of Customs (Exports), addressed the AEO seminar .Representatives from various export houses and Aepc India officials also attended the seminar. n

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APPAREL / INDUSTRY OVERVIEW

Outgoing

NCTO

chairman outlines priority areas for US textile industry the US President Trump’s pro-manufacturing agenda is forcing Washington to do what NCTO has long sought – rethink policies on trade, taxation, regulatory reform and a host of other issues. He said the time for change is now and NCTO is committed to working with the Trump administration to achieve the best policy outcomes on these and other issues.

US TEXTILES AND APPAREL INDUSTRY FACT FILE

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he outgoing chairman of National Council of Textile Organizations (NCTO), a Washington, DC-based trade association that represents domestic textile manufacturers, William V ‘Bill’ McCrary Jr. delivered the trade association’s 2018 State of the US Textile Industry overview at its 15th annual meeting on March 22. He highlighted

In 2017, the value of US man-made fiber and filament, textile, and apparel shipments was an estimated $77.9 billion.

US exports of fiber, yarns, fabrics, made-ups, and apparel were $28.6 billion in 2017. This is nearly a nine per cent increase in export performance over 2016. Shipments to NAFTA and CAFTA-DR countries accounted for 54 per cent of all US textile supply chain exports. The US is especially well-positioned globally in fiber, yarn, fabric, and nonapparel sewn products markets; it was the world’s 4th largest individual country exporter of those products in 2016. The US textile industry’s commitment to capital re-investment and a continued emphasis on quality and innovation make it wellpositioned to adapt to market changes and take advantage of opportunities as 2018 moves along.

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POLICY MATTERS McCrary Jr said, for decades, US policy systematically undervalued the importance of domestic manufacturing, and President Trump is right that this has hurt America. NCTO endorses President Trump’s macro policy objectives of reshoring industry, fighting for free but fair trade, enforcing US trade laws, making the US tax code more competitive, buying American, cutting unnecessary regulation, revitalising infrastructure, ensuring cheap energy, and fixing health care.

On trade, NCTO agrees with President Trump that US trading relationships must be rooted in fairness and reciprocity to

benefit a broad swath of American society.

America’s most important trading relationship is NAFTA, a pillar upon which the US-Western Hemisphere textile supply chain is built. At almost $12 billion combined, Mexico and Canada are the US textile industry’s largest export markets.

Moreover, Mexico provides vital garment assembly capacity the United States lacks at this time. NAFTA’s yarn-forward rule of origin contains loopholes that benefit third-party countries, such as China. Closing them would boost US and NAFTA partner textile and apparel production and jobs.

PRIORITY AREAS NCTO urges continued support for the Advanced Functional Fabrics of America (AFFOA). This defense department-funded program is matched three to one with private dollars and tasked with making it easier to develop and

commercialise the next generation of highperformance textiles. NCTO also calls for the US government to invest in improving automation for garment assembly because this technology shows promising potential to reshore US textile and apparel production and jobs.

Another NCTO priority is ensuring the US textile industry has uninterrupted access to reasonably priced energy. Most manmade fibers are derivatives of petroleum products and many textile producers are reliant on natural gas to power manufacturing operations. Noting this, NCTO supports construction of expanded oil & gas pipeline capacity to keep energy prices low. Finally, the US textile industry must acknowledge its workforce is aging, making the recruitment of new talent a priority.

US companies must continue to forge links with local and state leaders, and educators to make sure government policy nurtures a labour pool both adequate in size and well prepared to succeed in a competitive global economy.

FUTURE EXPANSE Although the US textile industry is world-class, it cannot afford to rest on its laurels. There will always be intense and sometimes unfair competition from abroad, changing consumer demands and inevitable economic downturns. Fortunately, the Trump administration wants to spur manufacturing output and jobs, and it is incumbent upon the US textile industry to seize this generational opportunity to usher in a new era of growth.

With so much at stake, the chairman urged all members of NCTO to stay active in this indispensable association that is fighting to promote the interest of the industry in Washington. n

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APPAREL / CONNECT 2018

Changing logistics dynamics to support apparel industry

T

o tap the burgeoning logistics industry, Apparel Connect 2018, a conference on Apparel logistics, was held on May 17, 2018 in New Delhi. The one –day conference provided an excellent knowledge sharing and networking platform to over 150 plus logistics and apparel industry professionals. Speaking on the growing importance of logistics industry in India, Sanjay Jain, President, CITI said, “Logistics has, over these years, been changing trade dynamics both back home and globally.

Especially the advent of GST has been a catalyst in putting spotlight on logistics and

this forum will only underscore this underlying fundamental.”

The conference was broadly divided into four sessions to discuss every aspect of the apparel supply chain.

EFFECTIVE SOLUTIONS Vandana Agarwal, Economic Advisor, Ministry of Civil Aviation, who was the chief guest at the event, sought industry feedback on where policy/regulatory environment is falling short of expectations. The participants emphasized on the need for a single window clearance system “To augment in some sense more competitiveness to textile and apparel industry fiercely vying within the competitive space,” said Satya Prasad Sahu, Commissioner Excise & Customs (Single Window).

A panel addressed the pressing issues of apparel exports

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APPAREL / CONNECT 2018

and apparel supply chain. Professionals from logistics service provider (LSP) companies, apparel exporters, freight forwarders, textile associations brain stormed on ways to make efficient and cost-effective apparel supply chain a reality for the segment to be a high-margin profit business. As HKL Magu, Chairman, Apparel Export Promotion Council, special guest at the event, emphatically remarked “the logistic cost has to attain uniformity and stability, which is the unsaid duty of logistic players who in turn inevitably need to get in dialogue with aviation players”

DELINEATING THE SUPPLY CHAIN The first session pondered over international logistics.

The discussions centered around the impact and channels of distribution, the economic impact of logistics and SCM on channels of distribution, fashion retail logistics and SCM, global risk, disruption and supply chain security, custom clearance and fluctuation in freight rates.

The second session focused on the importance of sticking to on time delivery through logistics besides developing an

efficient supply chain to reduce production time. As Vijay Mathur, Chairman, Global Skill Management pointed out, “Zara (Inditex) in its recent annual report mentioned as many as 173 times the word ‘logistics’ and some good 218 times about the ‘supply chain’. Not only that, its chairman who is a global icon uttered four times the magic world logistics in his personal address. This underscores the prominence today logistics function takes in any given global apparel organisation.”

The third session revolved around how to make the current

supply chain structure future ready along with managing offshoring and outsourcing.

As Anil Verma, President, Delhi Exporters Association explained, “Ease of doing business factor will surely go a long way in making us more competitive. But critically speaking, still there is a lot of elbow room available to make it more industry friendly and efficient.”

The last session of the conference dwelt on the need for maximising warehousing capacity and locating distribution facilities near major metropolitan areas to meet the demand for tighter deliveries. n

“There’s need for a single window clearance system to augment in some sense more competitiveness to textile and apparel industry fiercely vying within the competitive space,” said Satya Prasad Sahu, Commissioner Excise & Customs (Single Window) As HKL Magu, Chairman, Apparel Export Promotion Council, special guest at the event, emphatically remarked “the logistic cost has to attain uniformity and stability, which is the unsaid duty of logistic players who in turn inevitably need to get in dialogue with aviation players”

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APPAREL / INDIAN FASHION

Designers, entrepreneurs bring the focus back on Indian weavers

T

he Indian handloom industry has a rich and long history spread over thousands of years. From weaving during the Harappan civilization to spinning materials in Vedic times it’s been a long history. Even though the handloom industry, has taken major strides weavers in the country are facing great hardships. Not just because it is an unregulated sector but also because of increasing mechanization and industrialisation. The most troubling aspect however, is the huge disparity in pay between weavers and mass producers of fashion who

acquire their exquisite works for a paltry sum, and sell them at exorbitant rates.

WEAVING INTO THE MAINSTREAM However, things are expected to change with some entrepreneurs striving to bring weavers into the mainstream by ensuring they get remunerated fairly for their work. One such entrepreneur is Banka-based Udyan Singh, who founded Banka Silk, a non-profit organisation, which works for the betterment of weavers across Bihar since 2012. A civil engineer by qualification, the 35-year-old founded Banka Silk to develop a handloom cluster and an ecosystem to support handloom research, design and creation, as well as to train and empower local artisans and craftsmen in Bihar.

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APPAREL / INDIAN FASHION

Banka Silk recently collaborated with Avinash Pathania and Kiran Kheva, the organisers of the fashion week, India Runway Week, which was held in the national capital in April. As a part of the collaboration, over 40,000 weavers got a chance to sell their work directly to designers at prices deliberated by them. As a result, the weavers made a direct profit without the involvement of any middlemen.

PROMOTING LOCAL ART Founded in 2012 by Avinash Pathania, the Indian Federation for Fashion Development (IFFD) is aimed at facilitating action and inspiring growth in the fashion industry. The collaboration with Banka Silk, bridged the gap between designers and weavers. IFFD also promotes local artisans, while providing

quality handloom fabrics to fashion designers without them having to visit any stores. The company also signed agreements with around 30 participating fashion designers, giving them access to pure handloom fabrics at weavers’ price for the designers’ future works.

FINANCING GROWTH Another social entrepreneur working towards the upliftment of weavers is Mumbaibased costume designer and stylist Nikhat Mariyam Neerushaa, who, earlier this year, founded Roots in India an initiative for weavers with the aim to provide financial support, work, etc. Neerushaa’s program goes beyond buying, selling and providing market access to artisans by helping them in other ways. In Rajasthan, for instance, Neerushaa ensured weavers received water for dyeing clothes Pollachi-based husband-wife duo Mani Chinnaswamy and Vijaylaxmi Nachiar, who set up Ethicus, are credited with everything from encouraging farmers to set up the country’s first organic cotton farm in Pollachi, Coimbatore, to creating a sustainable fashion brand. One of the most significant aspects of their sustainable fashion brand is how each product (mainly saris and blouses) carries a tag with details of where the cotton was grown, who the artisans were and how many days it took them to complete the garment.

A PLATFORM FOR THEIR VOICE But nowhere is the plight of artisans as grim as conflict-ridden Jammu & Kashmir. Famous for their own style of intricate embroidery and winter wear, Kashmiri handloom artisans need not just an outlet for their work but for their voice as well. And channeling some of their concerns through her work is fashion designer Leena Singh who, in March this year, brought out a collection to pay tribute to the weavers of the state.

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The Kashmir-centric collection, ‘The Reversible Shawl’ comprising shawls, suit pieces, etc, made from Jamavar silk, was created after visiting the artisans’ homes several times over the past year. Several months went into exhaustive research, design and creation of each shawl, with Singh closely supervising the cuts and patterns for Jamavar silk. The fabrics used in the collection carry Singh’s designs, with hand-embroidered beadwork and tassels

by Kashmiri weavers.

BRIGHT FUTURE AHEAD Designers Ashima-Leena, who has been around for close to three decades now, is known for a fashion-forward approach but Singh now wants to dial it back a few notches to be able to resonate with regional artisans. She also plans to continue working with Kashmiri weavers and is hopeful that her customers would commission several pieces in the coming winter. These pieces will carry her design/motifs and the artisans’ handiwork, resulting in them being remunerated for the same. n

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APPAREL / AEPC EVENT CALENDAR

CALENDAR OF EVENT -

1

2018

2

9-12 July, 2018, HONGKONG

22-24 July, 2018, UK

Hongkong Fashion Week

3

Pure London UK Fair

4

12-15 August, 2018, USA

20-22 August, 2018, CANADA

Apparel Textile Sourcing, Toronto

Sourcing at Magic, Las Vegas

5

19-21 September, 2018, JAPAN

6

3-4 October, 2018, SPAIN

India Trend Fair at Tokyo

7

Buyer Seller Meet in Madrid

20-22 November, 2018, AUSTRALIA

International Sourcing Expo Australia APPAREL EXPORT PROMOTION COUNCIL MAGAZINE

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APPAREL / GST UPDATE

FAQ on E-Way Bill – Part B TERRITORIAL VALIDITY

• Movement of goods caused by defence formations • Where the consignor is Central or State government or local authority for transport by rail • Transportation of empty cargo containers • Transportation up to 20 Km from place of consignor to a weighbridge for weighment or from weighbridge to consignor provided the goods are accompanied by a delivery challan • Goods covered under notification no.

2/2017- CT Rate dated 28/06/2017 i.e. fully exempted goods • Goods exempt under notification 7/2017-CT Rate dated 28/06/2017 and 26/2017-CT Rate dated 21/09/2017 i.e. supplies to and from defence canteens and heavy water respectively.

• All India – E-Way Bill generated is valid in every state and UT

ACCEPTANCE OF E-WAY BILL • Has to be accepted or rejected by the supplier or the recipient o Within 72 hrs of the details made available to him on the common portal or the time of delivery, whichever is earlier o Non-communication in the above time limit means deemed acceptance

EXCEPTIONS No EWB is required to be generated in the following cases:

• Goods specified in Annexure to Rule 138 e.g. LPG for domestic supply, Kerosene for PDS, currency • Transportation by non-motorized conveyance like animal driven vehicles • Transportation from Custom ports, Airport, Air cargo complex and LCS to ICD or CFS • Transportation under bond from ICD or CFS to Custom ports, Airport, Air cargo complex and LCS • Transportation from one Customs station or Custom port to another Customs station or Custom port • Transportation under Customs supervision or Customs seal • Goods not under GST like alcoholic liquor for human consumption, petrol, diesel • Transit cargo from or to Nepal or Bhutan

DOCUMENTS TO BE CARRIED BY DRIVER • By Road: o Invoice or IRN (Invoice Reference Number) or Bill of Supply or Delivery Challan o Copy of E-Way Bill in physical form, or o E- Way Bill number in electronic form, or o E-Way Bill number mapped to RFID o RFID (Radio Frequency Identification Device) if notified by commissioner

• By Rail or Air or Vessel: o Invoice or IRN (Invoice Reference Number) or Bill of Supply or Delivery Challan Note: Commissioner can allow to carry Tax Invoice or Bill of Entry or Bill of Supply or Delivery Challan in place of E-Way Bill I f the circumstances so warrant.

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APPAREL / GST UPDATE

TRANSIT CHECKS • By authorized officers permissible to verify E-Way Bill • RFID readers to be installed at various locations • Goods once verified/checked in transit in one State/UT shall normally be not verified/ checked in anotherState/UT • Summary report of transit check to be uploaded online by the officer within 24 hours in Part A of FORM GST EWB-03 • Final report of transit check to be uploaded online by the officer within 3 days in Part B of FORM GST EWB-03 • Any detention beyond 30 minutes can be uploaded by the transporter in FORM GST EWB-04 on the common portal

turnover up to 5 crores in previous year and up to 4 digits if annual turnover more then 5 crores in the previous year o Any one of the reasons for transport like supply, export or import, job work, sales return, exhibition, for own use etc.

• PART B

FORM GST EWB-01 Asks for the following details:

• PART A o GSTIN of supplier and GSTIN of recipient. If one of them is not registered then the letter “URP” is to be filled up against that column o PIN Code of place of dispatch and PIN Code of place of delivery o Document number of Tax Invoice, Bill of Supply, Delivery Challan or Bill of Entry o Document date o Value of goods (including taxes) o HSN Code up to 2 digits if annual

o Vehicle Number for Road o Transport Document Number, for example: n Goods Receipt Number (by Road), or n Railway Receipt Number (by Rail), or n Forwarding Note Number (by Rail), or n Parcel Way Bill Number (by Rail), or n Airway Bill Number (by Air), or n Bill of Lading Number (by Vessel)

PENALTY FOR NON-COMPLIANCE • Penalty of Rs.10,000/- or tax sought to be evaded (wherever applicable) whichever is greater as per Section 122 of the CGST Act, 2017.

• Detention or seizure of goods and documents and conveyance duringtransit checks as per Section 129 of CGST Act, 2017.

Note: Part A on e-way bill was published in previous issue

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APPAREL / NOTIFICATIONS

Ministry Notifications

Sub.: Maintenance of Annual Average Export Obligation

DGFT in it Public Notice No. 10/2015-20 dated 24th May, 2018 has hereby makes the following amendments in Hand Book of Procedures 2015-20

After para 5.19, a new para 5.19A be inserted as under:-

5.19A : Maintenance of Annual Average Export Obligation The excess exports done towards the average export obligation fulfilment of an EPCG authorization during a ycar can be used to offset any shortfall in the Average EO done in other year(s) of the EO period or the block period as the case may be provided Average EO imposed is maintained on an overall basis, within the block period or the EO period as applicable.

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APPAREL / NOTIFICATIONS

Ministry of Commerce & Industry Creation of Directorate General of Trade Remedies (DGTR) in Department of Commerce.

T

he Government of India carried out an

remedy investigations instituted against them

Amendment to the Government of India

by other countries. The creation of DGTR will

(Allocation of Business) Rules, 1961 on May

provide a level playing field to the domestic

7, 2018 substituting “Directorate General of

industry. In the last three years, India initiated

Trade Remedies” in place of “Directorate General

more than 130 anti-dumping/countervailing

of Anti-Dumping and Allied Duties” in Department

duty/safeguard cases to deal with the rising

of Commerce. This has paved way for creation

incidences of unfair trade practices and to

of an integrated single umbrella National Authority

provide a level playing field to the domestic

to be called the Directorate General of Trade

industry.

Remedies (DGTR) for providing comprehensive

3. The DGTR will function as an attached

and swift trade defence mechanism in India. The

office of Department of Commerce.

The

amendment of Allocation of Business Rules has

recommendation of DGTR for imposition of

also mandated Department of Commerce with

Anti-dumping, countervailing & Safeguard

work pertaining to recommendation of Safeguard

duties would be considered by the Department

measures.

of Revenue.

2. Presently, the trade defence mechanism in

4. The DGTR will be a professionally integrated

India lacks optimality and takes more than

organisation with multi-spectrum skill sets

a year to complete proceedings in cases

emanating from officers drawn from different

pertaining to unfair trade practices. Currently,

services and specialisations. The DGTR will also

the Directorate General of Anti-dumping

bring in substantial reduction of the time taken

and Allied Duties (DGAD) deals with anti-

to provide relief to the domestic industry. The

dumping and CVD cases, Directorate General

newly constituted body is in consonance with

of Safeguards (DGS) deals with safeguard

the goal of Minimum Government Maximum

measures and DGFT deals with quantitative

Governance of the Prime Minister of India.

restriction (QR) safeguards. The DGTR will bring DGAD, DGS and Safeguards (QR) functions of

5. The Commerce and Industry Minister Sh. Suresh

DGFT into its fold by merging them into one

Prabhu expressed his satisfaction over the fact

single national entity. DGTR will deal with Anti-

that the proposal of creation of DGTR which

dumping, CVD and Safeguard measures.

was pending since 1997 has been approved

It will also provide trade defence support

under the leadership of the Prime Minister,

to our domestic industry and exporters in

making it an epochal event for the benefit of

dealing with increasing instances of trade

the domestic industry.

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AEPC AWARENESS INITIATIVES

Fashion Forecast Intelligence K n o w l e d g e Pa r t n e r

• • • • •

•

Mumbai .

Noida .

Jaipur .

HK Chennai .

Ranjan

All_Pages.indd 50

.

| Gurugam . . 9891754969| Ludhiana .

J.S. 9929871619 R | Tirupur .

. 9871385078 | 9810035722| . 9449826354 |

6/4/2018 5:55:03 PM

• •

• •

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61

st INDIA INTERNATIONAL GARMENT FAIR India Expo Mart, Greater Noida (City of Apparel) Showcasing Spring Summer 2019

16-17-18 JULY

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