The Indian government has announced a new Foreign Trade Policy (FTP) that will come into effect on April 1, 2023. Unlike previous policies, this one will be an open policy without any closing period. It will provide continuity in all schemes and offer flexibility to address various issues as they arise, making it more exporter-friendly.

The extension of the Foreign Trade Policy 2015-20 until March 31, 2023, was due to the prolonged lockdown caused by the coronavirus pandemic and its impact on the Indian economy. With the new policy, the government hopes to provide a boost to the country's exports.

Government's decision to continue the Export Promotion Capital Goods (EPCG) scheme and the Special Advance Authorization Scheme for the textiles and clothing industry, as been applauded. This move will help the industry to bridge the gap in the supply-demand of textile machinery and raw materials, which are heavily dependent on imports. Additionally, the policy will allow for the import of speciality raw materials that are not manufactured in India, thereby enhancing the industry's global competitiveness.

Another significant feature of the policy is the Amnesty Scheme, which settles unfulfilled obligations under the Advance Authorization Scheme and EPCG Scheme, capping interest to 100%, excluding additional and special additional duty from the export obligation, waiving penalty, and other measures would greatly benefit the textiles and clothing industry, particularly the spinning sector, by relieving them of long-pending disputes and problems.

The policy's focus on increasing exports and reducing the risk of forex rate volatility by enabling money transactions in Indian Rupee with certain countries and the policy's efforts to decentralize export promotion activities by making each district an export hub with e-commerce and inclusive growth initiatives have also been appreciated, as this move would greatly benefit the Micro, Small, and Medium Enterprises (MSME) exporters, which account for over 80% of the textiles and clothing value chain.

The weaving sector of Gujarat's textile industry, a prominent hub for Indian textiles, is set to receive a significant boost with the announcement by the central government that zero duty on high-speed weaving machines will continue. This decision has come as a major relief to the textile industry, which was apprehensive after the Union Budget had levied a 7.5% basic customs duty and 10% surcharge on high-speed weaving machines.

Textile associations from the state had previously written to the finance minister, requesting that imported machinery be granted the benefit of zero duty, as it had been for the past five years. The industry is now expected to receive new investments worth Rs 40,000 crore, with the continuation of zero duty for the next two years.

The investment is projected to reach $100 billion to cater to incremental market demand till 2030 and replace outdated machinery. It is estimated that $65 billion will be invested in the main production machinery, which is expected to create 15 million jobs by 2030.

The central government had previously provided relief through a concessional rate of duty for five years until March 31, 2023. It has now extended the concession for an additional two years, providing further incentives to the industry.

The global woven fabric market is expected to grow significantly over the next decade, reaching USD 624.50 Billion by 2033, with a CAGR of 1.40%, according to a new report by a leading research firm.

The report indicates that the demand for woven fabrics is increasing in various sectors, including fashion, home textiles, and industrial textiles.

The fashion industry, in particular, is driving the growth of the woven fabric market, with designers preferring woven fabrics due to their versatility and variety. The report also notes the rising demand for woven fabrics in the home textiles market for applications such as upholstery, curtains, and bedding. The industrial textiles sector is also experiencing a growing demand for woven fabrics, with new opportunities emerging for geotextiles and filter fabrics.

There are several market opportunities for woven fabrics, including the adoption of advanced technologies like digital printing and computer-aided designing, which allow for the creation of realistic patterns and designs on woven fabrics. Additionally, the rising disposable income and changing lifestyles in emerging economies like China and India are driving demand for textiles, creating new opportunities for the woven fabric industry. The increasing demand for eco-friendly and sustainable fabrics, such as organic cotton and recycled polypropylene, which will create further opportunities for the woven fabric industry.

However, there are several challenges faced by the woven fabric market, including competition from non-woven, knitted, and synthetic textiles, which some consumers prefer due to their durability and comfort. The market is also sensitive to fluctuations in raw material prices, such as wool, cotton, and polyester, which can impact profit margins and limit market growth. Finally, woven fabrics require skilled labor, which can lead to an increase in production costs, affecting profit margins and market growth.

Commerce and Industry Minister Piyush Goyal announced India's much-awaited new Foreign Trade Policy 2023-28, aimed at boosting the country's exports amid a global economic slowdown.

The policy comes after several extensions of the previous foreign trade policy (2015-20), which ended in March 2020. The current policy was extended repeatedly due to the Covid outbreak and resulting lockdowns, with the latest extension given in September 2022 until March 31, 2023.

The new policy is expected to outline the vision statement for taking India's goods and services exports to $2 trillion by 2030, a significant increase from the current export level of around $500 billion. The policy is expected to focus on various areas such as simplifying export procedures, boosting the competitiveness of domestic industries, and diversifying India's export markets.

In addition to the focus on boosting exports, the policy is also expected to address some of the challenges faced by Indian exporters, such as the high logistics cost, lack of access to credit, and the need for skill development. The policy is also expected to promote sustainable trade practices and encourage the adoption of digital technologies to enhance efficiency and transparency in the export process.

India's foreign trade has been adversely affected by the global economic slowdown and the disruptions caused by the Covid pandemic. The new policy is expected to provide a much-needed boost to India's exports and help the country achieve its ambitious target of becoming a $5 trillion economy by 2025.

The online clothing rental market is set to experience a significant increase in size by USD 3.00 billion between 2021 and 2026, according to a new report by Technavio.

The market's growth momentum will slow down at a CAGR of 17.91%. The report also identifies the rising popularity of experiential marketing as a key trend in the market, with vendors incorporating consumer participation in various marketing activities to attract more consumers to their platforms. Experiential marketing campaigns, including live marketing, participation marketing, loyalty, and event marketing, are particularly effective in targeting millennials, who represent the most important target group for these efforts. This trend is expected to drive growth in the online clothing rental market during the forecast period.

A significant growth in the women's segment is forecasted due to the increasing popularity of renting clothing for different occasions, as occasional clothing wear is priced higher than rental options. The environmental impact of dumping unwanted clothing into landfills is also driving the adoption of online clothing rental services. Additionally, the increasing number of working women who prefer online shopping due to a hectic lifestyle is contributing to the demand for online luxury apparel.

Geographically, the APAC region is expected to contribute to 44% of the market's growth during the forecast period, driven by the demand for affordable fashion and a wide assortment of fashion goods.

While the growing e-commerce fashion industry is a major driver for the online clothing rental market growth, inventory management is one of the primary challenges facing the market. Vendors must maintain a strong inventory management system to avoid stock-outs and ensure timely replacement of older clothing items with new items.

Additionally, a high-speed reverse logistics system is needed to complete product returns. Weak inventory management could affect the overall business of vendors operating in the global online clothing rental market.

The Directorate of National Consumers Right Protection (DNCRP) has warned fashion brands that their outlets may be temporarily closed if price gun machines are found during its market drives.

DNCRP officials issued the warning during a meeting with fashion outlet representatives at the directorate's office in Karwan Bazar, Dhaka. The director of the DNCRP emphasized that price tags should be attached to products at the factory level, not at showrooms or retail outlets. The change inprice tags has been noticed during market drives in the past year and, in most cases, the prices have increased after the change was made. The DNCRP director warned that actions would be taken if the rule was violated.

It has observed that some sellers from neighboring countries come to Bangladesh and rent a house to sell foreign clothes to customers. He noted that such activities harm local fashion houses. Actions will be taken against the market committee if irregularities are found in shopping malls.

The use of a pricing gun, a handheld device used to attach a price label to a product, is a violation of the DNCRP's rules.

Recent trade events like Cotton Conference in Zhangjiagang, the Hangzhou Chemical Fiber Forum, and the Shanghai Yarn Expo have all attracted large crowds indicating a strong enthusiasm for face-to-face interactions. However, while the surge in attendance may suggest a booming market, there are concerns about the sustainability of this recovery.

The home textiles market, driven by the hotel industry, is expected to remain strong for some time. Increased business travel and tourism are also likely to drive some clothing consumption. Nevertheless, industry players are becoming increasingly cautious as new orders continue to decrease, and a worrying sentiment is beginning to rise.

Export sales have also been a cause for concern as data from China customs shows a sixth consecutive month of year-on-year decline in textile and apparel exports. Clothing accounts for over half of the total textile and clothing exports, with exports to Europe, the United States, and Bangladesh decreasing by over 30%. Only a few markets, such as South Korea, Kyrgyzstan, Russia, Brazil, Kazakhstan, Saudi Arabia, and Singapore, have shown some growth.

Although the recovery of domestic sales seems to be in stark contrast to the decline in export sales, the strength of the recovery still needs to be determined by the real downstream demand.

Overall, while the recent offline gatherings have been encouraging, caution remains as the sustainability of the recovery and the uncertainty of the export market continue to weigh on the industry.

The EU's apparel imports from Bangladesh increased significantly by 35.69% in 2022, reaching $22.89 billion from $16.87 billion in 2021. Bangladesh is now the largest supplier of readymade garments to the EU. The overall EU apparel import figure in 2022 stood at $102.09 billion, a YoY growth of 20.97% from $85.23 billion in 2021.

China, the top apparel supplier to the EU, achieved a YoY growth of 17.01% to $30.14 billion in 2022, up from $25.76 billion in 2021. Turkey and India also witnessed growth rates of 10.09% and 21.02%, respectively. Meanwhile, Vietnam saw a 35.28% growth in its apparel imports to the EU, with Pakistan, Cambodia, and Morocco also witnessing significant YoY growth rates.

The unit price of apparel items also increased by 11.95% to $17.27 per kg, with Bangladesh's unit price remaining the second-lowest among the top ten suppliers, ahead of only Pakistan. In comparison, China, Turkey, India, and Vietnam all saw their unit prices grow, with China's unit price at $23.09 per kg, the highest among the top ten suppliers.

Manufacturers have noted that Bangladesh's cost of manufacturing has not gone up, but the apparel sector is facing inflationary pressures and high production costs due to the ongoing Russia-Ukraine war. Despite this, manufacturers remain optimistic about Bangladesh's future prospects in the apparel sector, with the country's growth rate outpacing China's. Bangladesh holds a 23% market share, and its position as the largest supplier of readymade garments to the EU is expected to continue to grow.

The textile industry in India has expressed concerns over the Bureau of Indian Standards' (BIS) pending certification for overseas manufacturers of viscose staple fibre (VSF).

The BIS will issue a certificate to VSF manufacturers who comply with its standards (IS17266: 2019), and the hallmark will become mandatory from April 1st. However, industry sources have pointed out that several variants of VSF are imported, which may cause a shortage in availability of the fibres.

Many overseas manufacturers who have applied for the certification are yet to receive it. Moreover, those who have placed orders for the fibre and are awaiting shipment will not be able to take delivery when the goods reach India without the hallmark, which will significantly impact textile manufacturers in India.

The industry has requested that the BIS expedite the certification process and implement the Quality Control Order only after all issues are sorted out. Furthermore, the BIS certificate will become mandatory for a few polyester items from April 3rd, but many manufacturers have not yet obtained the certificate.

The delay in certification may result in a shortage of fibres and increased costs for manufacturers. The textile industry is already struggling with the impact of the pandemic, and this delay may further hamper its recovery. The BIS needs to take prompt action to address these concerns and ensure that the certification process is completed as soon as possible.

Nike has to walk its talk of “Just Do It” as it witnesses an 11 per cent slide in profits from December 2022 to February 2023, compared to the same period 12 months ago. As it reported a profit of $1.2 billion the stated three-month period, robust popularity contributed towards it but profits dropped as increasing logistic costs and larger inventory brought it down.

The good news is its home base, the North Americas, remained loyal to the brand, where it did well but the not-so-good news is that sales in post-restriction China not only did not pick up but actually dropped by eight per cent. Globally, the brand increased its footwear sales by 20 per cent and the apparel portfolio’s sales upped five per cent compared to last year. Its global revenues increased by 14 percent at $12.4 billion

Challenges Nike faces

Greater China remains a worry for the brand as this is its third largest market in terms of revenues. Analysts are of the opinion Nike and other international sportswear brands have to contend with post Covid Chinese consumer being offered local brands that are cheaper and having come out of a crippling lockdown, the Chinese consumer is counting their yuans as many personal financial factors have made consumers just as weary of spending on non-necessary items like their European counterparts.

Nike’s operating costs rose 12 per cent to hit $3 billion due to strategic technology investments and wage-based expenses. During that period, gross margin dropped to 44.3 per cent due to logistics and freight costs. The drop was also attributed to low margins in Nike’s direct business following high markdowns.

International foreign exchange rate against the dollar have affected Nike’s pricing policy as higher product input costs and increased freight and logistics are responsible for dragging down profit margins.

However, Nike Chief Financial Officer Matthew Friend is upbeat as he says Nike has worked hard to manage its inventory successfully and is positioning the brand as a sustainable one with more opportunities to grow profit. He emphasizes compared to fellow-competitors Nike had done well in reducing a larger inventory level with effective promotions worldwide, ensuring movement of footwear and apparel. The flipside was supply chain problems in 2021 prompted retailers to ramp up deliveries in 2022. However, retailers struggled to align product supply with demand. Excessive quantities of merchandise had forced retailers to liquidate goods at low prices.

Analysis firm Third Bridge says, the challenges are really not that serious the sports footwear industry continues to remain robust as it heads into the first half of 2023, despite consumers tightening purse strings.

One quarter doesn’t make Nike a flop

In terms of overall profit growth, Nike remains not only profitable but also posts healthy profits year on year. The brand’s gross profit for 12 months ending February 28, 2023 was $22.200 billion, a 2.63 per cent increase year-over-year. Annual gross profit for 2022 was $21.479 billion, a 7.6 per cent increase from 2021 and the annual gross profit for 2021 was $19.962 billion, a 22.91 per cent increase from 2020.

While Greater China, its third largest market remains a region of concern, its two largest markets, the North Americas and EMEA remains buoyant as do the Asia Pacific and Latin American markets. In year ending 2022, Nike made a much more significant profit than its nearest rival Adidas which is burdened with cash outflow issues more than Nike is.