Confederation of Indian Textiles Industries (CITI) is planning to conduct a study to analyze whether the Goods and Services Tax (GST) on textiles and apparels (T&A) was creating an inverted duty structure hurting domestic production

The study would be commissioned by the Ministry of Textiles. The consultants would be asked to map various GST rates on products covering entire value chain, understand existing incentives under GST and Customs and gather industry representations and demands made till date, as per the Request for Proposal (RFP) circulated by the Ministry of Textiles.

They would also have to study such taxes of other countries where in some cases some products are clubbed together while some others are exempted for making finished product competitive.

The consultants would also be required to make suggestions with respect to changes in existing rates, suggest new rates, find out if the taxes have affected the prices and thereby affected affordability for the buyer.

Recommendations regarding any change to the present tax and duty structure (including fiber neutrality), with proper justifications, that can be extended within the ambit of international norms and laws such as WTO have to be made.

The US buyers’ shifting of apparel sourcing base from China offers an opportunity for Bangladesh to further develop its apparel industry especially the manmade fibre (MMF) segment, says a recent US study titled '2020 Fashion Industry Benchmarking Study' by the US Fashion Industry Association and University of Delaware (USFIA). Citing US official trade statistics, the report says the value of Bangladesh's MMF apparel exports to the US enjoyed 5.5 per cent growth in the five months of 2020. In contrast, exports from China and Vietnam suffered a significant decline as value dropped 44.5 per cent and 8.8 per cent respectively over the same period.

Mahmud Hasan Khan, Managing Director, Rising Group, reiterated the bottlenecks hindering growth potential includes the absence of backward linkage industry and infrastructure. The production of MMF items requires huge investment in backward linkage and there are few who want to invest amid the absence of required infrastructure including sufficient gas supply. In 2019, Bangladesh shipped apparel items worth $5.93 billion to the US, of which cotton items were about 77 per cent.

According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), out of 430 spinning mills in Bangladesh, only 27 are based on synthetic and acrylic fiber, and rest are cotton spinning mills. Out of the country's 2.05 million tonne of fiber import in 2018, the share of cotton was 93.57 per cent, said BGMEA.

During the past one week, domestic cotton prices increased about 5 per cent and may remain firm as buying by spinning mills and overseas firms has picked up, traders say. Most spinning mills in the country are running at 80 per cent capacity, said Mahesh Sarda President, Indian Cotton Association. The Association anticipates domestic yarn demand to improve with the festive season approaching.

Cotton Corporation of India (CCI), which started auctioning cotton about a month ago, has been able to sell almost 50 lakh bales of 170 kg each and prices have risen from Rs 36,500 to Rs 38,000 per candy of 356 kg. This has led to an increase in domestic prices by 5 per cent. Overseas firms such as Louis Dreyfus, Olam, Cargill and Glencore are bidding for the Cotton Corporation of India (CCI) stock in Rajkot mandi.

Firm global prices, lack of cotton in open market and weather risk were also attributing to the increase in prices in the domestic market, said Prerana Desai, Head-Research, Edelweiss Rural and Corporate Services. She expects prices to remain firm till the new crop arrives at the end of September.

Garment manufacturers Sanjay K Jain, Managing Director, TT Ltd, said this sudden spurt in cotton prices by 6 per cent in just a few days has taken the industry by surprise. He attributed this sudden jump in prices to cornering of cotton by selected few in the end season

Latest OTEXA statistics reveals the global textile and apparel trade is shifting with countries moving away from China to newer sourcing destinations like Vietnam, Bangladesh, India, etc.

Textile exports to the US decline 9 per cent

An analysis of the data from 2009 and 2019 reveals in 2019, China’s textile exports to the European Union, the United States and Vietnam accounted for more than 10 per cent, and 11 per cent, 10.4 per cent and 10.2 per cent respectively. Comparatively, textile exports to Bangladesh accounted for a smaller 5.4 per cent share, Japan accounted for 3.8 per cent, China Hong Kong accounted for 3.6 per cent, and Indonesia accounted for 3.5 per cent.

US textile imports from China shrink 9 per cent

In 2019, the value of China’s apparel exports to European Union, the United States and Japan declined by 4 per cent to 22.4 per cent, 21.6 per cent and 10 per cent respectively. The US imported textile and apparels worth $111.2 billion in 2019. Of this, the country imported apparels worth $ 83.8 billion and textiles worth $27.4 billion. Its textile imports increased by 53 per cent in 2019 compared to 2009.

China remained the largest sourcing destination for the US for its textile imports. The country accounted for 42 per cent share in 2019, followed by India with 14.6 per cent, and the European Union ranked third with 8.5 per cent. However, the volume of China’s textile exports to the United States declined by 9 per cent year-on-year in 2019.

Value of Chinese apparel imports declines 6.9 per cent

In apparel imports, the top five sourcing destinations for the US remained China, Vietnam, Bangladesh, Indonesia, and India. In 2019, the United States’ apparel imports from these countries accounted for 29.7 per cent, 16.2 per cent, 7.1 per cent, 5.3 per cent and 4.9 per cent, respectively. Among them, import value of apparels from China decreased by 6.9 per cent in 2019 compared to 36.6 per cent in 2009.

In the past 10 years, Vietnam has been emerging as a major garment producer and exporter. In 2019, the proportion of US apparel imports from Vietnam increased by 1.43 per cent year-on-year.

Value of apparel imports by EU increases, volume declines

In 2019, EU’s textile imports increased by 86 per cent to €28.1 billion from 2009, while its apparel imports increased by 53 per cent to €88 billion compared to 2009. The top six sourcing destinations for EU in 2019 were China, Bangladesh, Turkey, India, Cambodia and Vietnam.

In 2019, the value of EU’s apparel imports from China remained unchanged at $25-30 billion. However, the volume of its imports from China decreased by 14 per cent compared to 2009; due to the rapid growth of the EU’s apparel imports from Bangladesh.

Decline in Japan’s share of textile and apparel imports

In 2019, though Japan’s textile imports from China increased 31 per cent year-on-year compared to 2009 however, its share of China’s textile imports declined by almost 10 per cent. On the other hand, Vietnam’s share increased from 2.7 per cent in 2009 to 9.3 per cent in 2019.

In the past 10 years, the value of Japan’s apparel imports from China declined by 8 per cent while its volume declined by 27 per cent. In contrast, the value of Japan’s apparel imports from Vietnam, increased by 401 per cent in 2019 while its volume increased by 11 per cent.

INDA, the Association of the Nonwoven Fabrics Industry, announced the sixth edition of the annual Hygienix™ event will be held in an engaging new virtual format November 17-19. Its focus will be the impact of the global health pandemic on the absorbent hygiene and personal care markets.

The fully virtual format offers the convenience of participating from any location while providing vital program content on market and technical developments, scheduled networking, virtual exhibits, and product innovation awards, all of which have made Hygienix the premier industry event since it started in 2015.

Virtual Hygienix will provide dynamic speaker presentations on the relevant theme of Navigating the New Normal in Hygiene with live audience polling, real-time question & answer sessions with industry experts, networking with decision-makers, virtual tabletop exhibitions in Zoom break-out rooms, trivia and coffee breaks, cocktail hours and more over three days.

Originally scheduled as in-person conference in New Orleans, INDA moved it to virtual to ensure the safety of participants during the pandemic and be in-step with policy decisions to minimize the spread of COVID-19.

INDA President Dave Rousse will welcome participants to Virtual Hygienix on Nov. 17 and moderate a session on the Industry Outlook during COVID-19.

Industry experts will present supply-side and demand-side developments in both the North American nonwovens markets and the absorbent hygiene markets, market intelligence, economic insights, challenges and disruptions brought on by the coronavirus.

The 59th Global Fiber Congress will be presented online as a ‘Webinar Week’ between September 16 and 18, 2020. Also involved in the presentations and discussions are three technology experts from the Manmade Fibers segment of the Swiss Oerlikon Group.

The focus of the ‘Dornbirn-GFC 2020 – Webinar Week’ will be on speeches and discussions on the following topics: ‘Smart, Integrated, Digital Textile Production Chain’, ‘Personal Protective Equipment (PPE) – a Challenge for the Industry in Europe?’, ‘New Recycling Technologies – what are the Challenges?’, ‘Circular Economy in the European Industry Recovery’ and ‘Future Rules & Regulations for Textiles – what should be expected from the EU?’.

The opening speech will be a keynote address on ‘The Green Deal and its Implications for the Textile Industry’ by Leonore Gewessler, Federal Minister for Climate Protection, Environment, Energy, Mobility, Innovation and Technology for the Republic of Austria.

Tracking and tracing products in complex production processes using state-of-the-art digitalization technologies is at the core of the speech to be given by Sylvain Huck, Technology Manager Digital at Oerlikon Manmade Fibers. He will be talking on the topic of ‘Yarn DNA supported by Digitalization’ Markus Reichwein, Head of Product Management at Oerlikon Manmade Fibers, will address another important current topic: ‘On the Road to a Sustainable Manmade Fiber Industry’ on September 17, 2020.

With shows postponed or moving online, customer orders and manufacturing delayed and reliable sales channels disappearing, industry leaders are predicting that the fashion ecosystem will be unrecognizable once the coronavirus pandemic is over.

Ralph Lauren and Capri – owner of Versace, Michael Kors and Jimmy Choo – have both this month reported massive drops in sales in the most recent quarter. Ralph Lauren reported a 57 per cent drop in comparable sales and said it would be re-evaluating its brand portfolio, real estate and corporate structure. Meanwhile, revenues at Capri fell 66.5 per cent year on year.

Store closures and a lack of tourism are important driving factors for these declines. But many experts also note that the pandemic has forced a hard reset, leaving the fashion industry wondering what’s next.

In a feature for The New York Times, Irina Aleksander outlined how the rise of social media, the need for novelty and a sped-up fashion cycle created a perfect storm for the industry’s demise, even before the pandemic hit.

Once the pandemic engulfed the world, it began to expose the cracks in popular luxury brands. Diane von Furstenberg, for example, has laid off some 300 employees and closed all of its US stores except for one while restructuring the business.

The struggles of department stores have certainly not helped matters. As stores have closed, avenues for selling designers’ wares have been eliminated.

Barneys, formerly a popular destination for designer goods, liquidated in February. Neiman Marcus has filed for Chapter 11 bankruptcy with plans to close four department stores and 17 off-price locations. And Lord & Taylor could close all of its stores if it does not find a buyer in bankruptcy. Nordstrom also recently announced it would be closing all of its luxury Jeffrey boutiques.

A joint commitment on promoting safety and health, the welfare of workers and business sustainability was signed by four garment and textile unions and three employer associations in Indonesia on August 06, 2020 during an online meeting.

The declaration refers to the ILO Call to Action in the Global Garment Industry, and commits to protect workers and employers from contracting COVID-19, reduce the escalation of the unemployment rate and the loss of income of workers.

Both employers and unions pledge to implement ILO core labour standards, comply with occupational safety and health (OSH) regulations and engage with government and brands to maintain jobs and livelihoods of workers.

IndustriALL Global Union affiliates, Garment and Textile Trade Union Federation (FSB GARTEKS), is among signatories of the declaration. The Indonesian Employers’ Association (APINDO), the Indonesian Textile Association (API) and the Indonesian Footwear Association (APRISINDO) represent employers.

L Brands posted a $49.6 million loss during its second quarter of the current financial year as compared to profit of $37.6 million a year earlier. The company’s revenues of declined to $2.3 billion during the quarter from $2.9 billion a year earlier.

Total sales from Victoria’s Secret’s North American business — which includes the lingerie, beauty and Pink— declined 39 percent to $977 million. Same-store comparable sales declined 10 percent during the quarter. The company took a number of important steps to prepare Victoria’s Secret and Bath & Body Works to operate as standalone separate companies, improve L Brands’ profitability, maintain liquidity during the pandemic and maximize its financial performance.

That includes securing Goldman Sachs and JP Morgan to serve as financial advisers in the process of turning Victoria’s Secret into a private company. The company also plans to close 250 stores in 2020, with many more closures likely to occur in 2021

As per data released by the National Bureau of Statistics, from January to June, profit of China's industrial enterprises above designated declined 12.8 per cent year-on-year and 6.5 percentage points to CNY 2.51 trillion compared to the first five months of this year, The profit of manufacturing industry declined by 9.8 per cent year-on-year to CNY 2.12 trillion

From January to June, the main income of textile enterprises above designated size decreased by 15.6 per cent to CNY 966.94 billion compared with the same period the previous year. The profit of textile industry totaled CNY 40.21 billion, with year-on-year decline of 5.6 per cent. While the main business income of enterprises above designated size in garment and accessories industry dropped by 16.4 per cent to reach CNY 577.63 billion, profit of garment and accessories industry declined by 27.4 per cent to reach CNY 23.53 billion.

The main business income of leather, fur, feather and their products and footwear industry from January to June declined by 17.2 per cent year-on-year to reach CNY 460.1 billion; their profit totaled CNY 21.23 billion, with year-on-year decrease of 29.5 per cent.

From January to June, the main business income of enterprises above designated size in chemical fiber manufacturing industry declined by 18.4 per cent year-on-year to CNY 349.36 billion, profit plunged by 41.9 per cent year-on-year to CNY 7.23 billion. In June, the profit of industrial enterprises above designated size totaled CNY 666.55 billion increased by 11.5 per cent year-on-year.