FW
A recent study by RAPID and the Friedrich-Ebert Stiftung paints a worrying picture for Bangladesh's ready-made garment (RMG) industry. The report warns that Bangladesh's apparel exports to the European Union (EU) could plummet by up to 21 per cent due to the combined impact of Vietnam's rising dominance and Bangladesh's impending graduation from Least Developed Country (LDC) status.
Reasons for the decline
On major reason is the EU-Vietnam Free Trade Agreement (EVFTA), in effect since 2020 that grants Vietnam zero-duty access to the EU market, giving it a significant edge over Bangladesh. This advantage is projected to boost Vietnam's apparel exports substantially. Add to this Bangladesh oncoming graduation from LDC status in 2026. This will result in the loss of duty-free access to the EU under the Everything But Arms (EBA) initiative, potentially leading to tariffs of up to 12 per cent on Bangladeshi garments. Bangladesh has lagged behind Vietnam in developing its domestic textile industry. This means higher reliance on imported raw materials, making Bangladeshi garments less competitive on price. The study also highlights Bangladesh's slower progress in implementing effective policies to improve its business environment and attract investment.
Table: Apparel exports to EU
|
Country |
Apparel exports to EU (2022) |
Projected apparel exports to EU (2027) |
|
Bangladesh |
$18 billion |
$14.22 billion |
|
Vietnam |
$22 billion |
$26.4 billion |
The study emphasizes the importance of Free Trade Agreements (FTAs) in shaping global trade. While the EVFTA benefits Vietnam, Bangladesh currently lacks comprehensive FTAs with major markets like the EU. Negotiations for FTAs with Japan and Singapore are ongoing, but experts stress the need for diversification and structural reforms to enhance competitiveness.
In fact several factors impact garment exports. For example stringent rules of origin under the EU's Generalized Scheme of Preferences (GSP+) can hinder Bangladesh's exports. And the EU's focus on sustainability and labor rights requires Bangladesh to improve its practices to maintain market access. Also, inadequate infrastructure, including port facilities and energy supply, adds to production costs and delays in Bangladesh.
The study therefore urges the Bangladeshi government to:
• Negotiate extended transition periods with the EU for LDC graduation.
• Relax rules of origin under the GSP+.
• Pursue additional FTAs to diversify market access.
• Invest in backward integration, particularly in man-made fibers and recycling technologies.
• Improve trade infrastructure and address energy supply deficits.
• Align with EU standards on sustainability and labor practices.
Focusing on its trade relationships with eight member nations including Japan, Singapore, New Zealand, Chile, Peru, Malaysia, Vietnam and Brunei, the updated version of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was released by the UK Fashion and Textile Association (UKFT) on December 15, 2024.
Offering valuable insights to navigate this trade bloc, the guide delves into the implications of the CPTPP for UK fashion and textile companies. The document is set to evolve with the integration of UK.
Currently the guide highlights issues like fashion and textiles in context, understanding CPTPP, Rules of Origin (ROO) and Product Specific Rules (PSR), Fashion specific ROOs and PSR, statements of origin duty-free categories, VAT requirements, intellectual property, certificates of origin.
The guide complements UKFT’s broader range of resources aimed at helping UK fashion and textile businesses expand globally. This includes tailored guides to export markets and Free Trade Agreements, alongside comprehensive advice on key import markets.
As seen from its ‘Fiscal Year 2024 Corporate Responsibility Report, parent company of brands Coach, Kate Spade and Stuart Weitzman, Tapestry reduced its Scope 1 and 2 greenhouse gas (GHG) emissions besides meeting science-based targets during the year. The company also made significant progress in sustainability, social impact, and community engagement under its framework, The Fabric of Change, highlights the report.
During the year, Coach extended the lifespan of its products by adopting the Coach (Re)Loved program. Giving a second life to around 14,400 of the brands’ items, the program took back 6,100 units, and repaired 91,000 items globally during FY2024. The company also managed to reduce GHG emissions by up to 80 per cent and water use by up to 95 per cent by introducing the iconic Soho Bag made from recycled denim materials.
While Kate Spade provided culturally relevant, community-led mental health resources to over 100,000 women and girls worldwide in FY2024, Stuart Weitzman launched a limited-edition fabric for Spring 2024 in collaboration with a non-profit supporting women’s empowerment, with Mercado Global to create a limited-edition fabric for its Spring 2024.
Investing in its communities and sustainability innovations helps Tapestry and its brands ensure long-term success, says Joanne Crevoiserat, CEO, Tapestry, Inc.
Despite current financial downturn hampering global economy, India managed to increase its RMG exports by 11.4 per cent to $9.85 billion from April-November 2024, as per the Apparel Export Promotion Council (AEPC).
India’s inherent strengths and strong supportive policy framework help boost the industry’s growth, says Sudhir Sekhri, Chairman, AEPC. The country continues to benefit from an end-to-end capability, a strong raw material base and a focus on sustainable practices by factories, he adds.
In future, more apparel orders will flow into India, opines Sekri. This will help India reinforce the global brands’ trust in its production capabilities. Upcoming trade show, Bharat Tex 2025 will also help attract global trade opportunities to India, he adds. Besides fostering collaboration the event will help India expand sourcing network and attract more FDI into the country, he adds.
Shrinking crop acreage in the North and Gujarat followed by a decline in production is likely to result in a 36.53 per cent dip in India's cotton exports during the 2024-25 season. Beginning October 1, 2024, India’s cotton exports are likely to contract to 18 lakh bales as against 28.36 lakh bales in the 2023-24 season, as per the Cotton Association of India (CAI).
Cotton acreage in the North spanning Punjab, Haryana and Rajasthan has shrunk by 35 per cent while Gujarat acreage has lowered by 15 per cent, reveals Atul Ganatra, President, CAI. This will help India stabilise cotton prices in comparison to the global market, he adds.
Total cotton pressing during the 2023-24 is estimated to reach 302.25 lakh bales compared to 327.45 lakh bales in the previous season. By November 2024-end, cotton supply in India is likely to rise to 108.41 lakh bales. This will include 69.22 lakh bales of cotton pressing, imports of 9 lakh bales and the opening stock of 30.19 lakh bales.
Cotton consumption till November-end is estimated to be 54 lakh bales while the exports are likely to reach 4 lakh bales of 170 kg by the end of the month.
China-based fabrics and home textiles manufacturer, Kelida plans to set up a production unit in the Qantara West Industrial Zone in Egypt.
To be developed with an investment of $30 million across 92,000 sq m, the project will be executed in partnership with the Suez Canal Economic Zone (SCZONE).
The textiles unit is a part of a two-project contract worth $38 million signed between Enxiao You, Chairman, Kelida and Waleid Gamal El-Dien, Chairman, General Authority of SCZONE.
More than 90 per cent of Kelida’s production will be directed towards export markets in Europe and the United States. The other project to be developed includes a food manufacturing facility in partnership with the Turkish company Saray Biskuvi ve Gida San AS.
These two projects will bring the total number of contracts being developed in the first phase of the West Qantara Industrial Zone to eight. Collectively, these projects represent investments worth of $309 million, covering 751,000 sq m and generating approximately 14,200 job opportunities.
Popularly known as Co-optex, Tamil Nadu Handloom Weavers’ Co-Operative Society has opened a new Kolam outlet at Anna Salai in Chennai. Built at the cost of Rs 5.60 crore, this modern facility was inaugurated by Udhayanidhi Stalin, Deputy Chief Minister, Tamil Nadu.
Renowned for its high-quality handloom silk and cotton varieties, Co-Optex blends traditional craftsmanship with contemporary designs. The organisation projects its sales will rise during festivals, as it continues to launch new collections, particularly sarees, to cater to festive shoppers.
Spanning 8,000 sq ft, the newly built Co-Optex Kolam outlet is situated inside a four-storey building equipped with modern amenities, including elevators and parking facilities. The first three floors measure 2,100 sq ft each, while the fourth floor covers 1,700 sq ft.
Offering an enhanced shopping experience to customers, this new facility combines spacious interiors with a wide range of handloom products.
As a part of the inauguration, Stalin also launched the Pongal festival discount sale. For 2025, Co-Optex aims to increase its sales to Rs 50 crore, from Rs 43.46 crore achieved during the 2024 Pongal season. To attract customers, it is offering a 30 per cent discount on all silk and cotton varieties during the festive season.
This new outlet reinforces Co-Optex’s commitment to promoting handloom products and supporting the livelihoods of weavers across Tamil Nadu.
H&M Group has acquired a minority stake in a Swedish retail technology platform, Voyodo. This strategic investment will help strengthen the group’s partnership with platform.
Voyado believes, the collaboration will help enhance the platform’s capabilities and enable it to better serve larger customers while creating greater value and driving international expansion.
Erik Lagerblad, Head, H&M Group Ventures, explains, the investment will further support the platform’s future growth and strengthen their offering for other enterprise customers.
Voyado has been growing at an annual growth rate of 35 per cent since the last few years. The company has also captured market share across the Nordics and Benelux and now plans to expand into key markets such as the UK and Germany.
The platform aims to drive profitable sales by optimising ecommerce, creating personalised customer experiences, and streamlining communication across channels.
Erica Sandelin Ekelund, CEO, Voyado, adds, the firm aims to establish itself as Northern Europe’s most beloved retail tech companion while maintaining profitability and scalability.
Offering valuable insights and resources, H&M Group’s investment aligns with the platform’s efforts to expand into new segments, she adds.
Men’s shirt imports by the US grew notably in the month of October 2024, as per the latest OTEXA data. Analysed by team Apparel Resources, the data shows, men’s shirt imports by the US grew by 3.80 per cent Y-o-Y to $251.78 million during the month.
In terms of volumes, imports of men’s shirts by the US increased by 9 per cent Y-o-Y to 2.78 million dozen. Bangladesh and India remained the top two exporters of men’s shirts among leading Asian manufacturing hubs.
During the month, Bangladesh’s shipment of men’s shirts to the US increased by 8 per cent Y-o-Y to $61.19 million; whereas India’s exports declined by 27 per cent in value to $55.12 million. However, despite this massive fall, India still remains ahead of Vietnam, China and Indonesia in exports of men’s shirt to the US.
Vietnam’s exports of men’s shirts to the US rose by 28.30 per cent to $41.22 million during the month while exports by China declined by by 7.40 per cent to $17.69 million
Growing at a 3 per cent CAGR, the men’s shirt market in the US was valued at $16.40 billion in 2024, as per Statista.
Cotton Corporation of India (CCI) had procured over one third of total cotton bales arrivals in the market at minimum support price till mid-December 2024-25.
The Corporation’s total cotton bales arrivals amounted to 31 lakh bales during this period. The procurement operations were conducted across all major cotton-producing states, with Telangana and Maharashtra leading the way, notes Lalit Gupta, Chairman and Managing Director, CCI.
Raw cotton prices are currently trading below the MSP levels due to weak demand from yarn mills and declining cottonseed prices. The Centre has increased the MSP for medium staple cotton by 7 per cent to Rs 7,121 per quintal and to Rs 7,521 per quintal for longer varieties for the 2024-25 season.
According to the Cotton Association of India (CAI), daily market arrivals have already surpassed 2 lakh bales, with cumulative arrivals reaching over 83.30 lakh bales across the country. Despite the estimates for cotton production reducing by around 7 per cent to 302.25 lakh bales, adverse weather and reduced acreage continue to impact output in some regions during 2024-25.
