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"India’s textile sector has the second-largest employment after agriculture, employing 32 million workers. It has the potential to double employment in the next seven years as per the vision document (for 2024-25). India has a rich mix of synthetic and natural fibres and yarns but still remains a cotton-focused. India was finding it profitable to export raw cotton to China because of Chinese government’s support for stockpiling cotton yarn. Also, the presence of cotton in yarn, fibre, fabric and garments is close to 70 per cent of usage within India, which is also reflected in exports."
India’s textile sector has the second-largest employment after agriculture, employing 32 million workers. It has the potential to double employment in the next seven years as per the vision document (for 2024-25). India has a rich mix of synthetic and natural fibres and yarns but still remains a cotton-focused. India was finding it profitable to export raw cotton to China because of Chinese government’s support for stockpiling cotton yarn. Also, the presence of cotton in yarn, fibre, fabric and garments is close to 70 per cent of usage within India, which is also reflected in exports. But, global trends are exactly the opposite, i.e., it has 70 per cent of synthetics and man-made fibres. So, India’s domestic and export mix is the opposite of global fashion and demand trends.
The inverse skew
The inverse skew of fibre usage in India is due to the skewed tax treatment. Until GST, the cotton value chain wascompletely free of indirect taxation whereas man- made fibre suffered a dead-weight tax of 12 per cent excise. That anomaly was supposed to be removed by uniform GST. Instead of a fibre-neutral policy, we have a dual GST structure, with 18 per cent GST on upstream, and 5 per cent on all downstream, leaving an inverted duty structure. This has already led to much disruption, as can be seen in shutdowns or strikes in powerloom clusters in Bhiwandi or Coimbatore.
Urgent need for a new policy
Textiles, along with agriculture, construction and tourism, have large-scale job creation potential. It is a sector dotted with small and medium enterprises, which make up 80 per cent of the units. Thus, it is ideally positioned to be a poster boy for ‘Make in India’. This is also a sector which is undergoing a huge change due to automation, digital printing and the relentless rise of e-commerce. These developments threaten to completely change the face of this industry. India’s share of textile exports in total exports (at 12 per cent), is half of what it was in 1996. Bangladesh’s garment exports exceeded India’s in absolute terms back in 2003 and today, it exports twice that of India. Even late starter Vietnam overtook India in 2011. So, to address challenges like changing consumer and fashion trends, modernisation of machinery, skill upgradation, a fibre-neutral tax policy and meeting the needs of the e-commerce phenomenon, we need a national policy and implementation plan. A coherent and holistic national textile policy on the lines of national telecom policy can give a much fillip to Telecom Sector and avoid the risk of losing to countries like Vietnam and Bangladesh.
PowerTex India scheme
Recently the government launched PowerTex India, a comprehensive scheme for powerloom sector development, simultaneously at over 45 locations in the country. Launching the scheme in Bhiwandi, Thane district, Maharashtra, the Union textiles minister, Smriti Zubin Irani had said Bhiwandi will be known for resurgence in powerloom sector. The powerloom sector alone employs over 44 lakh people, and the scheme is expected to benefit small powerloom weavers.
With an outlay of Rs 487 crore for three years from 2017-18, it has nine major components, including two new ones. The two new schemes are Pradhan Mantri Credit Scheme for powerloom weavers and solar energy scheme for powerlooms. Existing powerloom units, new ones, and group enterprises in weaving will now get 20 per cent project cost with a ceiling of 1 lakh as margin money subsidy and 6 per cent interest subvention, both for working capital and term loan up to 10 lakh for a maximum period of five years.
Ecommerce marketplace ShopClues os pushing its IPO forward and has now hired Deepak Sharma as its chief financial officer to lead the IPO and take it forward. Sharma was formerly working with offline retailer V Mart and led the IPO for the retailer in 2013. He has been brought on board with the mandate of helping ShopClues hit the capital markets.
ShopClues founder and CEO Sanjay Sethi says they may be ready for quarterly reviews by the end of next quarter and will address all regulatory issues by then. The company is looking to go public next fiscal and are meticulously tracking market sentiments. Revenues have doubled since November last year along with them becoming unit economics positive. Focusing on fashion and lifestyle has yielded good results for the company.
Over the last one year, the company has been moving away from segments like high priced smartphones, electronics and focusing on fashion and lifestyle. Fashion and lifestyle contributes about 40 per cent of overall sales. Unlike Flipkart and Amazon, ShopClues is known for its low value merchandise catering largely to the Tier II consumers.
ShopClues currently clocks about 2.5 million shipments per month. Radhika Aggarwal, Co-Founder, they had decided to move away from sectors where heavy discounting is widely prevalent.
Nearly 2,000 working units of the knitwear/readymade garment cluster in Tirupur, employing more than a lakh people, called for a day’s strike on July 21 to protest against the decision to place them under the 18 per cent GST slab.
Among various jobs at Tirupur, knitting, dyeing and compacting attract only five per cent of GST, while other works such as printing, embroidery, button fixing, checking, ironing and packing are attracting 18 per cent.
Manufacturers say even finished garments attract only five per cent GST and there is no logic in bringing small and tiny job working units under 18 per cent. They say that since the cluster functions under a 90 day credit format (in the value chain), such a high GST will put the sector under financial stress, which will render people jobless.
Levying 18 per cent tax is seen as disturbing the seamless credit flow and defeating the very objective behind GST. The problem is said to arise from the fact that due to the global economic situation, many foreign buyers have started operating on a credit basis where payments for exported goods are realised from 90 to 150 days from the date of shipment. This credit period is generally passed to every segment of the value chain whereby job workers are paid with credit terms of around 90 days.
In this scenario, the situation where small and tiny job workers have to pay 18 per cent immediately at the end of the month, despite their payments being realised much later, is expected to create a huge working capital blockade causing financial stress to micro and small industries.
Stoll has launched an innovative networking concept for the textile production of tomorrow. Knitelligence combines all its software solutions and covers the entire value creation chain of flat-knitting production. From design idea to development and manufacture, knitelligence offers tailored solutions for every component. Customers will benefit from more consistent workflows, shorter, transparent production cycles, and an increase in quality, productivity, and, therefore, overall plant efficiency.
Customers can not only design their processes to be considerably more efficient, but can also react far more flexibly to the requirements of the market. Stoll, based in Germany, is one of the world’s leading manufacturers of flat knitting machines. The portfolio includes flat knitting machines and pattern software that are used to produce fashion and technical textiles. The company exports its products to more than 70 countries worldwide. With innovative developments and state‐of‐the‐art production, Stoll makes a whole host of knitting trends possible.
The company has represented intelligent progress and pioneering quality for over 144 years and continues to set standards in the age of digitization. With knitelligence Stoll is creating substantial added value for its customers, highly efficient flat-knitting production through the optimization and networking of individual production steps.
"Sourcing is key in every industry vertical. More so, it holds utmost importance especially in apparels sector, where fashion cycle changes fast. Right sourcing decision helps gain greater efficiencies by bringing flexibility in entire supply chain. Countries such as China, Vietnam, and Bangladesh have been pioneering sourcing and India has a lot learn despite having gained support from the government. As Yamini Jain, Senior Consultant, Threadsol points out for a brand, sourcing is the right manufacturer who can deliver quality garments at the right price, time and quality who can deliver quality garments at the right price, time and quality."
Sourcing is key in every industry vertical. More so, it holds utmost importance especially in apparels sector, where fashion cycle changes fast. Right sourcing decision helps gain greater efficiencies by bringing flexibility in entire supply chain. Countries such as China, Vietnam, and Bangladesh have been pioneering sourcing and India has a lot learn despite having gained support from the government. As Yamini Jain, Senior Consultant, Threadsol points out for a brand, sourcing is the right manufacturer who can deliver quality garments at the right price, time and quality who can deliver quality garments at the right price, time and quality. And for manufacture, it is the vendor from whom the raw material or job is being procured.
Discussing the challenges, Jain says both brands and manufactures are facing serious challenges while sourcing due to the versatile and dynamic nature of the industry. Cost and speed are particularly important and at the same time quality, compliance and capacity cannot be compromised while sourcing. The biggest challenge lies in balancing all these factors.
Sustainability – the biggest concern
Growing awareness about sustainability has been posing a greater threat to the industry. As Louis Amelie Leuchenberger, Marketing Head, FourSource says to hit lower lead times and still remain price competitive is a tough call. It is difficult for manufactures to remain sustainable and having long lasting relationship. The need of the hour is further innovation from brands. Ashok Chhajer, Director, Krishna Lamicoat argues balancing the lead time, the right quality, right deliveries is challenging for any brand. Earlier, people used to work with few suppliers and those suppliers were paid well and they were happy to work with them. With stiff competition, newer challenges have been springing up every day. Hence, brands have to be actively involved in innovation, that is the only key right now. Chhajer feels it should be a two-way street and efforts should be made from the retailers’ end as well. Manufactures have to be more lean and competitive.
Getting its act stronger
While China and Vietnam have clearly taken the lead, India hasn’t been able to register growth. While countries are looking for other sourcing avenues, India should quickly present its act strongly. Chhajer says textile policies in India are not supportive. There is no dearth of qualified people to make garments at low cost, we have not been able to develop textile in our country. Even small countries like Sri Lanka they contribute lot of good garments.
Today China has become expensive, hence, buyers are looking for newer markets. Though fewer sourcing executives plan to decrease their China sourcing share, most are still working on shifting away from China. Hence, there is an opportunity for India to cash in on. The current government has taken a lot of initiatives to employ people. Moreover, many states such as Odisha and Jharkhand have come up with apparel parks and local government is taking a lot of efforts in promoting the garment industry. It’s time for the entire industry to get together and become the sourcing hub of the world.
Indonesia’s textile and garment exports increased 0.62 per cent in the first half of 2017. A 20.4 per cent rise in knitwear garment exports contributed significantly. However, the country noted a decline in exports to major markets such as the US, the EU and Japan by 3.6 per cent, four per cent and five per cent respectively.
The boost in exports is also said to be a result of the introduction of automated processes in textile and garment manufacturing. Automation has made the exporters even more competitive in terms of pricing and delivery, thereby boosting the country’s exports.
The country is aiming to attract foreign importers with improved economic and political stability. This could, in turn, be a deciding factor in reinforce Indonesia’s position in the textile and garment industry. The target is to increase textile exports by 1.7 per cent in 2017. Indonesia’s textile and textile product exports grew three per cent from January to February this year.
The country’s clothing and textiles go mainly to the United States, Japan, Turkey, China, and Germany. There is a high demand for Indonesian batik cloth and other traditional or cultural Indonesian fabrics. Indonesia is one of the largest textile and apparel producers in the Asean region. The industry in Indonesia employs approximately 17 per cent of the country’s workforce and contributes significantly to the country’s economy.
India's cotton production may rise by 10 to 12 per cent this year despite the erratic weather. The area sown as on July 14 was 90.88 lakh hectares, up by 17 per cent from 73.93 lakh hectares sown on the corresponding date of the previous year. Farmers are not interested in sowing pulses or soyabean. Price of pulses and soyabean are ruling below the minimum support price while cotton is one of the few crops that gives good returns to farmers.
Cotton seed companies too have confirmed a healthy growth in sales. It is estimated that cotton seed sales will be higher by at least ten per cent this year over the previous year.
Though re-sowing of the fiber crop has taken place in some areas, the seed industry does not see any major adverse impact on cotton production due to the dry spell in the first half of July. Major cotton growing areas in India are Maharashtra, Gujarat, Telangana and Karnataka.
India is the largest producer of cotton in the world, accounting for about 26 per cent of world cotton production. It has the largest area under cotton cultivation in the world and constitutes about 40 per cent of the world area under cotton cultivation.
"The textile sector, contributes over 50 per cent to Pakistan’s exports, and now it is facing tough times. A textile package of Rs 180 billion was announced in January this year. Under the package, Rs 38 billion was allocated for exports while a meager Rs 3.5 billion has been disbursed as of now. Textile manufacturers are in a fix if they should continue production, even after knowing that they would make losses. All sub-sectors of the textile industry are running under capacity and 25-35 per cent of all projects have shut down."
The textile sector, contributes over 50 per cent to Pakistan’s exports, and now it is facing tough times. A textile package of Rs 180 billion was announced in January this year. Under the package, Rs 38 billion was allocated for exports while a meager Rs 3.5 billion has been disbursed as of now. Textile manufacturers are in a fix if they should continue production, even after knowing that they would make losses. All sub-sectors of the textile industry are running under capacity and 25-35 per cent of all projects have shut down. Only garments and made-ups sub-sectors have been able to sustain production.
Non-starter policies
The budget deficit is resulting in non-payment of sales tax refunds which is estimated at Rs 250 billion. The Finance Minister had promised to clear sales tax refunds by August 15, 2017. The Minister’s promise relates to the Refund Payment Orders (RPOs) issued by the Federal Board of Revenue (FBR) till April 30, 2017. Government policies regarding refunds, payment of incentives, under-invoicing and smuggling are adversely affecting the textile sector. If the government solves these three issues, it will give breathing space to this sector.
The entire system is virtually controlled by FBR’s auditors to the exclusion of every other officer. This results in harassment of the assesses, delay in issue of RPOs, uncalled for rejections of input taxes, not giving in writing reasons for such rejections, and their resultant unaccounted shenanigans. RPOs issued in July2016 have still not been cashed. This entire entangled system of refunds has snowballing effect on the cash flow of the textile sector. Rs250 billion is still stuck in refunds cost, and in interest amounting to Rs22 billion or 1.75 per cent of total textile exports to exporters.
Afghanistan imports raw materials under the ATT for industries that do not exist in Afghanistan and these raw materials end up in Pakistan without payment of import duties. These two factors have resulted in losses to the national exchequer, as well as resulted in the closure of industries, leading to unemployment. As a suggestion, the government should create a Special Directorate or Collectrate whose sole job should be to control underinvoicing.
"With a new avatar, this year’s Interfilière edition was all about new collaborations and closer alliance between the lingerie and swimwear show. Experimental work from St Martins School of Art, with students demonstrating new bio-materials, and even a French underwear brand called Spartan explaining men’s briefs with silver fibre to shield the wearer’s delicate parts from mobile phone radiation, offered innovative streaks of new age professionals."
With a new avatar, this year’s Interfilière edition was all about new collaborations and closer alliance between the lingerie and swimwear show. Experimental work from St Martins School of Art, with students demonstrating new bio-materials, and even a French underwear brand called Spartan explaining men’s briefs with silver fibre to shield the wearer’s delicate parts from mobile phone radiation, offered innovative streaks of new age professionals.
Prints reigning the closet
Like last year, prints were a hit this year too. A special exhibition was dedicated to print technologies, including 3D printing that can create innovative solutions. Dutch start-up brand Mesh demonstrated customisable, bespoke bras using scanning, 3D printing to prototype bras for customers. Creatures founder, Dan Walters described the overall print trend as being ‘full on print’ prints were also texturally very sensuous.
Collaborations were the spotlight during the entire event. For instance, Asahi Kasei and Wolford has been collaborating to improve the luxury hosiery line’s product range with the ‘Salad Collection of hosiery’ made with Roica’s Eco Smart Family of premium stretch fibres supporting Wolford’s Gold Certified Cradle to Cradle standards. This means the garment has an end of life certification that it can break down naturally without polluting the environment with harmful materials according to the Hohentein Environmental Compatibility Certification. The tights will be in shops for AW 18-19. Roica is also working with lace manufacturer Iluna to bring added value to ranges by luxury lingerie brand Aubade.
The Willy Hermann/Invista partnership created the ‘Casual Bra’ project. Bralettes for smaller cup sizes and wire-free bras for bigger cup-sizes, as well as performance fabrics for sports bras have been major focusses for Willy Hermann. Using differing percentages of Lycra has been part of the answer, with percentages as high as 48 per cent Lycra for the natural support ranges.
In intimate wear, comfort is one of the most important parameter. Shape wear companies are taking note of this with the use of control panels and using fabrics, fibres and design to create shape wear that supports, moulds, contours without constriction and excessive compression. Easy to apply, wear and wash garments add value to the wardrobe.
Athleisure has also been creating a new wave of growth for intimate wear companies. Work Leisure engages with professional’s 360 lifestyle, where there is a need for clothes that can be worn to run or bike to work and then head to a meeting. Work clothes are becoming more casual and demands for specialist fibres is growing, with a savvy consumer with money to spend. Comfort, performance and good design are essential to this trend, making sports clothes integrate into a working wardrobe.
Fabric trends
In terms of colour and fabric trends, there were the usual forecasts for colours in lingerie, split between the more romantic and the more adventurous for 2019. Soft nude and pastel tones, including soft blues, peaches, with a chalky finish, lace both as trim and a main fabric is important. Sofileta is producing a nanofabric of 60gsm only beaten by Willy Herman’s fabric weighing in at a feather light 50gsm.
Bishchoff led the way in 3D fabrics, fishnets adorned with notions, bobbles, and ribbons, stand out lace florals and embroidery. Ribbons, zippers and other notions were also very expressionistic and much more creative than before. Elastic trips seem to be centre of attraction. Elastic knitters made headlines with lacy edging, intricate visual designs that put elastic centre stage, a big leap forward for the elastic trim industry.
India is preparing a Rs 2,600 crore incentive package for the leather and footwear sector to boost exports and job creation. The package, which includes both tax and non-tax benefits, was prepared on the lines of the steps announced for the textile sector last year. Major players include: Bata, Liberty Shoes, Mirza and Relaxo Footwear.
The industry is mainly dominated by products made of synthetic leather. It accounts for about 90 per cent of the total leather manufacturing in the country. About 30 lakh people are directly employed in the sector. The aim is to increase the sector’s exports to 15 billion dollars by 2020 from the current seven billion dollars.
In the global market, China is giving a tough competition to Indian leather manufacturers in terms of pricing. The growth in the Indian fashion and lifestyle market has given an impetus to the footwear industry as well. From a basic need-based industry, it has become an evolving fashion and style category.
India is the second largest footwear producer in the world, with footwear production accounting for approximately nine per cent of the global annual production – 22 billion pairs as compared to China, which produces over 60 per cent of the global production.
