Engineered for definite functions, technical textiles are used in the agriculture, healthcare, defense, construction, aerospace, automobile and sports sectors. Global demand for technical textiles is growing at a CAGR of 4 per cent and is expected to reach $220 billion by 2025, says a report titled ‘Technical Textiles: The Future of Textiles,’ by Invest India.

India market to grow to $28.7 billion by 2020-21

As per the report, Asia-Pacific dominates the global technical textiles market with a 40 per cent share while North America occupies a 25 per cent share and Europe 22 cent. Reasons for Asia Pacific’s dominance include: rapid urbanization and technological advancements in its medical, automobile and construction industries coupled with ease of production, low-cost of labor and favorable government policies.

The report estimates Indian market for technical textiles growing at a CAGR of 12 per cent over the past five years. The industry contributes about 0.7 per cent to GDP accounting for approximately 13 per cent of total textile and apparel market. Factors like easy availability of raw materials like cotton, wood, jute and silk along with a strong value chain, low cost labor, power and changing consumer trends have led to India’s strong growth in this sector. A baseline survey of the textile industry by the Ministry of Textiles predicts India’s technical textiles market will grow to $28.7 billion by 2020-21.

Government initiatives to increase growth rate

The report suggests, current consumption of technical textiles in India is 5 to 10 per cent against 30 per cent-70 per cent in some advanced countries. The government has introduced a National Technical Textiles Mission that aims to increase India’s average growth rate in technical textiles to 15-20 per cent besides increasing domestic market size to $40 billion-$50 billion by 2024. The mission will achieve this through market development, market promotion, international technical collaborations, investment promotions, and the Make in India initiative.

The Central government has also introduced initiatives such as allowing 100 per cent FDO in this sector under the automatic route. In 2019, the ministry launched 207 HSN codes to help monitor import-export data and provide financial support and other incentives to manufacturers. The ministry also organizes Technotex India, in association with FICCI.

Besides, the Centre has set up integrated textile parks, eight centers of excellence, and the Amended Technology Upgradation Fund Scheme. In December 2019, it announced $1.4-trillion national infrastructure plan to develop projects in energy, road, railway, urban development, irrigation, and health sectors. The Textiles Ministry also aims to create an ecosystem model to develop mega textile parks for technical textiles besides upgrading existing 19 functional textile parks. It has suggested creating a special fund for R&D worth $13 million in technical textiles. It also proposes to form a National Centre of Research in Technical Textiles that would be tasked with monitoring long- and short-term research.

Industry standards and focus on skilling

The report also emphasizes on the need to establish industry standards and focus on skilling. It concludes by saying the overall development of infrastructure, coupled with the availability of skilled and low-cost labor, focus on research and development activities, and strong manufacturing capabilities make India an attractive investment destination. On its part, India needs to convert its COVID-19 crisis to an opportunity and facilitate better communication between the government and the industry.

Libas Designs which specializes in contemporary and ethnic men's and women's wear, wearing apparel, jewelry and other related items in India, is venturing into the FMCG segment. The company has received in-principle approval from the NSE for change in name of the company from Libas Designs to Libas Consumer Products (LCPL).

Besides engaging in designer ethnic wear, LCPL will undertake manufacturing importing and exporting of various niche FMCG and agro products. The company also plans to acquire Golden Bricks Infrastructure, which is a part of the promoter group and specializes import of rock salt from all over the world and also export of agro products for last two years. The acquisition would give LCPL an access to the various rock salt mines that Golden Bricks has tied up with, and LCPL would in turn import, crush, process and package this slat for third parties. Additionally, LCPL plans to launch its own brand across India.

As per recent data from the Japan Department Stores Association (JDSA), apparel retail sales in Japan dropped by 40 per cent during the first half of 2020 compared to the same time in 2019. The decline was noted both in the first quarter spanning January-March 2020 as well as in the April-June quarter of the COVID-19 struck. A monthly surge can be seen from mid-May onwards, as the state of emergency has been lifted in stages across the country since May 14, 2020 before being finally ended on May 25 , 2020.

As a consequence, growth was unprecedented in June ’20 over May ’20, which shows a large number of shoppers have come out buying post-pandemic apparels. The yearly decline among the majority of fashion shoppers shows lingering fears of infections in the region. Monthly rise of 217 percent in June ’20 over May’ 20 was huge, which is a strong sign that the post-outbreak rebounding of the apparel industry has begun. In the quarter affected by COVID-19 from April-June ’20, sales of Japanese apparel declined 66.81 per cent to $1.27 billion. Sales declined 22.30 per cent from the same time in 2019 in January-March ’20 quarter to $3.28 billion.

Hit by difficult times, Iconic American retailer Gap Inc plans to close more than 225 Gap and Banana Republic stores globally this year. As of 1 August, Gap Inc. had a total of 3,814 stores across 42 countries including 1,643 stores of Gap and Banana Republic alone.

The company has many brands in its kitty like Old Navy, Athleta, Janie and Jake brands apart from Gap and Banana Republic.

This decision of closures underlines how the company has been struggling to keep profits up during the pandemic, especially in malls, as a majority of the stores located in malls are being closed for good. Total sales across major brands declined 18 per cent in the second quarter.

However, the saving grace has been the 95 per cent increase in online sales which has been able to offset some of the losses.

Gap and Banana Republic suffered the most with a 28 per cent and 52 per cent decline in sales, respectively, making the store closures inevitable. Athleta, on the other hand, has been a bright spot for the company with net sales rising 6 per cent and comparable sales up 19 per cent.

The exact locations and breakdown of closures is not yet known but the company intends to reveal that during a virtual investor meeting in October.

Hugo Boss expects gradual improvement for the second half of 2020. The brand has not been able to provide reliable sales and earnings forecast for full-year 2020. Nevertheless, it remains optimistic that the global retail environment will continue to gradually improve. This should also positively impact the Group’s sales and earnings development in the second half of the year and allow it to make further progress along with its overall recovery, which has started at the beginning of May.

In the second quarter of fiscal year 2020, both the retail sector and the apparel industry were severely impacted by the global spread of COVID-19. Temporary lockdowns resulting in widespread store closures, a sharp deterioration in consumer sentiment, as well as international travel restrictions weighed on global industry sales.

Earlier planned for June 2 to 6, this year, ITM International Textile Machinery Exhibition and HIGHTEX International Technical Textiles and Nonwoven Exhibition have been rescheduled to June 22-26, 2021, The exhibitions are held every two years in partnership with Tüyap Tüm Fuarcılık Inc. and Teknik Fuarcılık Inc., and in cooperation with TEMSAD.

Preparations for the exhibitions continue at full steam to bring together hundreds of manufacturers and global investors who develop leading technologies in their fields. To be held at the Istanbul Tuyap Fair Convention and Congress Center next year, the exhibitions will feature textile investors from all over the world.

ITM 2021 and HIGHTEX 2021 Exhibitions will be held in 12 halls spanning 120.000 sq m. It will host 1,250 international exhibitors who will set new records in the field with its visitors and exhibitors. Some of the world’s leading textile technology companies will showcase their newest models and latest developments in production technologies of technical textiles and nonwovens in these trade shows.

Indian Texpreneurs Federation (ITF) has appealed to Union textile, commerce and finance ministries to remove antidumping duty on viscose fiber. The federation says, this will create a level playing field for the entire viscose value chain and help a big section of MSMEs in their growth. In post-COVID environment, world’s largest consuming markets like the US are favoring India as a preferred alternate destination for textile and apparel sourcing. In addition, many countries like Vietnam are also looking to source more fabrics from India. Hence, Indian companies need to focus on these products to increase the country’s exports, says ITF.

Presently, polyester fibers are available in India at international prices due to structural changes brought out in previous budget that removed anti-dumping duty on PTA. However, due to anti-dumping duty protection at fiber stage, viscose fiber prices in India are much higher than international prices with a difference of around Rs 20 to 23 per kg. Moreover, Indian spinners also face huge injury due to multi-fold jump in cheap Chinese yarn imports. The import of VSF spun yarn increased to 56,262 tonne in 2019-20 due to the import of cheaper Chinese yarn in the market.

Countries like Bangladesh, Vietnam, Cambodia have gained exponential share in the global MMF based textile and clothing exports, as these countries have access to fiber at international prices, which makes them competitive globally even without having their own source of raw material.

Textile mills and fabric manufacturers in India have sought the removal of anti-dumping duty on viscose staple fiber to make the textile industry internationally competitive.

Ashwin Chandran, Chairman, Southern India Mills Association (SIMA) said textile manufacturers, who use viscose staple fiber, supply products to niche markets where there is a huge demand for viscose fabric. Removing anti-dumping duty on these viscose fibers will align domestic prices align with the global prices, he added.

Powerloom weavers are dependent on imported viscose spun yarn to compete in the international market. However, almost four lakh spindles in India with a production capacity worth Rs 1,000 crore, lost the opportunity to tap this import potential due to the availability of high viscose fibers in the domestic market. As M Senthil Kumar, Former Chairman, Powerloom Development and Export Promotion Council points out, viscose fabric is in high demand in the fashion with many leading brands seeking viscose products in the last four-five years. Indian Texpreneurs Federation (ITF) says , countries such as Vietnam are looking to source more fabrics from India, especially man-made fiber and blended fabrics.

Estimates by Bain & Company shows, by the middle of this decade global luxury spending by Chinese nationals will increase to 50 per cent from 35 per cent in 2019. Top fashion brand Louis Vuitton reported a 65 per cent increase in China sales in the second quarter, compared to the same period of 2019. The company’s Paris-listed stock declined by just 4 per cent this year, while shares in rival handbag maker Hermès increased by upto 8 per cent.

According to Bernstein Research, young Chinese consumers whose incomes are bolstered by their parents’ savings are a major source of growth for luxury brands. They are like Japan’s “parasite singles” who lived rent-free in the family home during the 1990s and spent a big chunk of their wages on designer baubles.

Japan’s luxury boom wasn’t ended by slower growth but by demographics. As the population aged, spendthrift young shoppers weren’t replaced in adequate numbers to keep demand high. Today, the Japan accounts for just 10 per cent of global luxury sales.

As per Statistica Indonesia(BPS), the pandemic has aggravated issues related to competitiveness in the Indonesian textile and garment industry which contracted by 14.23 per cent year on year (YoY) in the second quarter of this year as domestic and global demand slowed, compared to an annualized growth rate of 20.71 percent in the corresponding period in 2019

The textile industry contracted more than the manufacturing industry, which shrank by 6.19 per cent YoY in the second quarter of this year. Redma Gita Wirawasta, Researcher, Indonesian Textile Institute (Indotex) believes the country’s textile industry to be less competitive than those of other nations primarily because of high energy and logistics costs, low productivity, multilayered value-added tax regime from the upstream to the downstream and low-tech machinery.

According to Faisal Basri, Economist, Institute for Development of Economics and Finance (INDEF), continued use of outdated machinery corresponded with the investment data, which showed that the majority of investment funds had been channeled towards developing new buildings and not to upgrading machinery and equipment

Investment in machinery and equipment fell by 12.87 per cent YoY in the second quarter as the pandemic caused the Indonesian economy to contract for the first time since the 1998 Asian financial crisis. The economy contracted by 5.32 per cent in the second quarter as household consumption and investment declined in the fallout from the COVID-19 crisis.

In addition, the health crisis also caused household spending on clothing, footwear and garment maintenance services to decline at an annual rate of 5.31 per cent.