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CII has been calling for a single national tax for a decade and it will help make GST implementation as smooth as possible. Shobana Kamineni, President, Confederation of Indian Industry (CII) says the Industry is completely ready for the introduction of the Goods and Services Tax (GST) bill, a landmark tax reform expected to be rolled out from July 1.
The reform agenda has picked up with substantive policies such as GST, insolvency and bankruptcy norms, FDI liberalisation and ease of doing business being implemented. Conditions are positive for an economic recovery in the current year, with GDP growth expected to lie in the range of 7.5-8 per cent. Kamineni while addressing the media said while there are many opportunities available in India, further strengthening of the growth process and job creation is on the horizon.
Going forward, it is possible to target 1 per cent additional growth each year to reach 10 per cent in the next three years. She said that it is possible to create 5 million jobs each year, if the GDP growth rate can be boosted by an extra 1 per cent. CII's analysis shows as of now, it is creating about 3.7 million jobs annually. 10-12 million people enter the working age population every year. Of these, about half actually do not look for jobs as they prefer to go into education or other activities. CII's intensive skill development activities are ongoing and are designed to enhance the employability of the workforce continued Kamineni.
CII would continue to request the government for quick action in reducing corporate income taxes for all corporates. This has become urgent given the lowering of tax rates across many other countries. The 25 per cent rate is currently applicable only for companies with a turnover up to Rs 50 crores. Eventually, the corporate tax rate could be brought down to 18 per cent together with the removal of all incentives.
Indonesia’s textile and textile product exports grew three per cent from January to February this year. The country’s clothing and textiles are exported to mainly the United States, Japan, Turkey, China, and Germany. There is high demand for Indonesian batik cloth and other traditional fabrics. Indonesia is one of the largest textile and apparel producers in the Asean region. The industry employs approximately 17 per cent of the country’s workforce and contributes significantly to the country’s economy.
Textile manufacturers are looking at Middle Eastern countries as potential export destinations. However, domestic textile products have been losing their foothold in Indonesian market over the past five years. Imported products dominate 70 per cent of the domestic textile market.
Plans are on to curb imports of textile and textile products to protect the domestic industry and encourage development of upstream textile industry. The aim is to make Indonesia competitive in the international market with other Asian major textile makers such as India, China, Vietnam and Bangladesh. Another problem is that most of the country’s textile factories especially weaving and knitting sector still use old machines, which are no longer efficient.
The Indian textile machinery industry grew 10 per cent from 2013 to 2014. It’s expected to reach Rs 35,000 crores by 2021. The textile machinery sector plays an increasingly vital part in shifting India’s textile and apparel industry from labor-intensive production to a more advanced and industrialized sector. Spinning machinery segment is expected to see the fastest growth over the next five years. Much of this segment’s growth can be attributed to expansion of spinning machinery. High demand for cotton exports and expansion of spinning machinery capacities will help India maintain high demand for spinning machinery over the next few years.
The Indian textile machinery industry has been experiencing tremendous growth over recent years, facilitated by the country’s booming textile and apparel market. India is expected to be a leading textile producing country in the world by 2020 and the domestic textile and apparel market in India is estimated to grow at 12 per cent CAGR over 2020. The technical textile market in India is also showing a promising growth, at 18 per cent CAGR. All this is believed to further boost demand for and output of textile machinery in India.
India’s apparel exports to the US grew 0.8 per cent y-o-y in March 2017. India is the fifth largest apparel exporter to the US. The growth in export value was solely on account of an increase in volumes. During the month, export volumes increased three per cent while export realisation fell 2.1 per cent.
Despite a growth in exports in March 2017, India’s share in the US apparel import market contracted by 30 basis points. It stood at 6.5 per cent during the month. For the year ended March 2017, India’s cumulative apparel exports to the US decreased 2.8 per cent. This was solely on account of a 3.6 per cent fall in export realization. Export quantity grew by a meager 0.9 per cent. Despite a fall in exports, India’s market share expanded by ten basis points to 4.5 per cent.
As for other top apparel exporting countries to the US, China recorded an increase of 5.7 per cent in its exports in March 2017. The country’s share in the US apparel import market expanded by 40 basis points to 23.7 per cent. Apparel exports by Vietnam and Indonesia grew 15.7 per cent and four per cent. Vietnam’s market share increased by 140 basis points to 13.9 per cent and that of Indonesia remain unchanged at seven per cent. Bangladesh reported a 6.5 per cent drop in exports in March 2017 while its market share dipped 90 basis points to 7.6 per cent.
Africa Sourcing and Fashion Week will be held in Ethiopia from October 3 to 6, 2017. Many international textile suppliers and buyers are expected to attend the third edition of the biggest textile trade fair in Africa. Nearly 250 international exhibitors from 25 countries are expected to be present.
A conference running parallel to the trade fair will discuss the themes currently dominating the textile industry. It will focus on becoming particularly relevant to more and more fashion buyers and present new approaches to eco fashion and sustainable solutions. The spotlight will be on various issues, including sustainability, with particular focus on production, environment and certifications. A fashion show, trend area and matchmaking platform are some of the other highlights.
International manufacturers of textile machines will also be showcasing new technologies for the African market. Italian textile machinery makers will present a range of product innovations. Designers will also get specific information targeted at them. Presentations by experts on international fashion designed in Africa and future forecast on women's, men's and children's apparels are lined up.
Three new trade fair brands Texworld Addis Ababa, Apparel Sourcing Addis Ababa and Texprocess Addis Ababa will be launched at Africa Sourcing and Fashion Week.
India may impose an anti-dumping duty on imports of acrylic fiber from the European Union, China, Belarus, Ukraine and Peru. There are evidences of dumping of acrylic fiber from these regions. Anti-dumping duties are levied to provide a level playing field to local industry by guarding against cheap below cost imports.
Countries dump products in India as it is one of the most attractive markets for global producers due to its large middle-class population. Imposition of anti-dumping duty is permissible under the WTO regime. Both India and China are members of the Geneva-based body.
WTO does not regulate the actions of companies engaged in dumping. Instead, it focuses on how countries can or cannot react to dumping. The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a- vis foreign producers and exporters.
An anti-dumping duty is a protectionist tariff on foreign imports that it believes are priced below fair market value. Dumping is a process where a company exports a product at a price lower than the price it normally charges on its own home market. To protect local businesses and markets, many countries impose stiff duties on products they believe are being dumped in their market.
Indonesian Textile Association (API) chairman Ade Sudrajat says from the past five years, the domestic textile products have continued to lose their foothold in competition on the domestic market. Imported products have held control of 70 per cent of the $10 billion market a year leaving only 30 per cent of the market for domestic products. In addition, clothing no longer appears a priority requirement for the people with motorcycles figuring higher in their priority.
The government needs to address the problem. Earlier, there government helped through (BLT) that could increase peoples' buying power. API also noted that 90 per cent of the basic material for readymade wear is imported like cloth from South Korea, China and Japan. However, API is optimistic that the country's textile industry would continue to grow as indicated by data from the Central Bureau of Statistics (BPS) which showed that the country's exports of textiles rose 3.8 per cent year-on-year in the first quarter of 2017.
Earlier, the industry ministry had said they would coordinate with the trade ministry to curb imports of textiles and textile products (TPT) to protect domestic industry. Director general of chemicals, textiles and multifarious industries Achmad Sigit Dwiwahjono points out the government encourages development of upstream textile industry. The challenge faced by the company is that most of the country's textile factories especially weaving and knitting sector still use old machines, which are no longer competitive in efficiency. Exports of TPT grew only 2 per cent year-on-year to $2 billion in the first two months of 2017.
Vietnam feels garment and textile exports to Russia can grow manifold. At present, Vietnam’s apparel exports to Russia make up roughly two per cent of the country’s total exports. The figure is expected to reach ten per cent in the next few years. To begin with, Russia has a cold climate, so demand for jackets and jeans is high. Vietnam’s garment and textile exports to Russia have increased by over 30 per cent year-on-year.
The free trade agreement between Vietnam and the Eurasian Economic Union came into force in October 2016. However, there are problems. Vietnam has to offer products at competitive prices since Russia still faces economic difficulties and sales of apparel in the market are not as strong as those in the European Union. Basically the Russian market has to be thoroughly explored. Regular contact has to be made with partners for long-term cooperation.
Vietnamese enterprises should have business strategies to cope with fierce competition on quality and price in the market. It is necessary to create high-quality products, improve designs, and build brand names. Additionally the geographical distance between Vietnam and Russia will make it difficult for businesses to complete payment. More bank branches in Russia will facilitate direct payment between businesses.
The Tirupur garments cluster has caught the attention of states such as Telangana and Odisha, which now plan to replicate some of the successes in their own state. Officials from Odisha textile handloom industries department recently visited Tirupur to have first-hand information and the cluster’s operations over the years.
The Odisha government, which came out with a dedicated apparel policy early this year, has not only sought the help of Tirupur Exporters’ Association (TEA) in drawing up its strategy but also in setting up training and skill development institutes. Recently, the Odisha government had set up an apparel park near Bhubaneshwar and plans to have two more such parks in the state. On the other hand, Telangana IT minister KT Rama Rao has taken a great deal of interest in creating such clusters in the state.
KT Rama Rao has met Union textiles minister Smriti Irani and sought her help in creating such clusters to capitalise on Telengana’s rich cotton crop cultivation. Cotton is the major commercial crop of Telengana and the state government has thrown in incentives under its textile policy to woo investments from garment units in Tirupur to set up similar units in the cotton-growing districts of Warangal, Karimnagar, Medak, Khammam.
Meanwhile officials of both the states have appealed to big garment units in Tirupur such as Dollar, Lux and Rupa to invest in their respective states.
Hong Kong-based Li and Fung a major outsourcing service provider mainly catering to major Western retailers and fashion brands such as Wal-Mart Stores and Macy' is planning to spend $150 million over the next three years to build an an online system for better efficiency in its services.
Li and Fung is a global supply chain manager primarily for US and EU brands, department stores, hypermarkets, specialty stores, catalogue-led companies, and ecommerce sites. Today, Li & Fung employs about 22,000 people worldwide. It does product design and development, raw materials and factory sourcing and capacity building, vendor compliance and distribution. It has over 250 offices in 40 markets. It works with 15,000 suppliers to service 8,000 customers.
The Hong Kong trading giant in the age of digitalization is striving to stop the steady decline of sales because of the growing trend between manufacturers and retailers. Li & Fung aims to create a system that halves the time needed for the process of planning, developing, manufacturing and delivering retailers' products, from about 40 weeks to 21 weeks by 2019.
The centerpiece of Fung's turnaround strategy is building a system that allows the entire process of planning and designing apparel products to be done over the internet. The system, which will have a 3-D virtual design feature, will allow corporate customers to view images of finished products and see production costs for various design options, such as using different buttons on a product.
Amid the erupting tensions between the US and China Li & Fung is considering forming a partnership with a Hollywood animated film studio to help upgrade and refine the system. The company is adapting to corporate clients' need to design and produce items more flexibly in response to fleeting fashion trends and capricious customers. But smaller suppliers cannot afford to adopt this strategy. But still the new system will enable customers to cut back on inventories and increase profitability.
