India and the UK are inching closer to a Free Trade Agreement (FTA), with potential significant impacts on the textile and apparel industry. While negotiations are ongoing, there are numerous anticipated effects on both imports and exports from this perspective. Data from the Global Trade Research Initiative (GTRI) suggests a potential $5 billion gain for India's textile and apparel exports due to the FTA.

Boost for Indian textile exports

Tariff reductions will be one of the most important effects. The UK currently imposes 4-12 per cent tariffs on Indian textiles and apparel. FTA-driven tariff reductions could make Indian products more competitive, boosting exports.

The UK is a major apparel market valued at $73.5 billion in 2022. Easier market access could open doors for Indian manufacturers, especially in segments like women's wear and home textiles. For example, as per WTO stats Bangladesh, which has an FTA with the UK, saw its apparel exports grow 30 per cent in 2021, highlighting the potential benefits for India as it could replicate this success with the UK market. The UK's growing demand for ethically sourced and sustainable clothing could benefit Indian producers who prioritize these practices.

Challenges for Indian textile imports

However, the FTA could increase competition as lower tariffs could make UK-made textiles and apparel more affordable in India especially those producing similar products at higher costs, posing competition to domestic manufacturers. Job displacement is another worry. Concerns exist about potential job losses in the Indian textile industry, particularly in segments where UK imports have a cost advantage. As Sanjay Jain, President of the Confederation of Indian Textile Industry states, "The FTA should be designed to ensure a level playing field and not lead to job losses in the Indian textile sector." 

In fact, as per Peterson Institute for International Economics Vietnam's FTA with the EU led to a 10 per cent decline in its textile and apparel exports due to competition from European producers. India should learn from such examples and ensure adequate safeguards. 

Also, compliance will be a major focus for Indian exporters. Meeting stricter UK regulations on sustainability and labor practices could be challenging for some Indian manufacturers. Indian textile producers will need to focus on quality and design to compete effectively.

Table: India-UK FTA and its effects

Impact on UK imports

Reduced tariffs could lead to cheaper textiles and apparel imports from India for UK consumers. It will also lead to supply chain diversification. The UK could diversify its textile supply chain, potentially reducing reliance on other countries. However, some UK stakeholders worry about potential quality issues with cheaper Indian imports.

However, experts caution tariff reductions alone won't guarantee success. As India needs to focus on: 

• Improving product quality and design.

• Enhancing supply chain efficiency and reducing production costs.

• Investing in sustainability practices to meet growing consumer demand.

• The deal should ensure inclusivity, supporting small and medium-sized enterprises (SMEs) in the textile sector.

• Addressing non-tariff barriers like technical regulations and product standards is crucial for smooth trade flow. 

• The FTA should promote ethical and sustainable practices throughout the textile and apparel supply chain.

Indeed, the India-UK FTA holds promise for both countries' textile and apparel industries. However, realizing its full potential requires addressing concerns about quality, competition, and compliance. Careful implementation and strategic industry development are key to ensuring a mutually beneficial outcome.

Renewcell, the pioneering Swedish textile-to-textile recycler, has reached a significant milestone with the addition of 35 new members to its Circulose Supplier Network (CSN). The network now boasts a total of 151 spinners, weavers, textile mills, garment manufacturers, and more, marking a remarkable growth from its inception just under a year ago with 47 members. This expansion underscores a collaborative effort within the industry to address the pressing need for sustainable practices in clothing production.

The latest cohort includes a diverse range of suppliers, comprising vertical operations, yarn spinners, garment manufacturers, denim, and home textile mills. Among them, Brushes & Needles from Sri Lanka and TexComs from Indonesia stand out for their dedication to developing innovative and sustainable textile solutions leveraging Circulose technology. Their commitment reflects a growing consumer demand for eco-friendly products and a shift towards sustainability in the fashion industry.

Strategic partnerships formed across South Asia, Southeast Asia, and Turkey further solidify Renewcell's global footprint. With a focus on establishing Circulose manufacturing hubs in key regions, the company aims to streamline the supply chain and enhance accessibility to sustainable materials. The partnership with Birla Cellulose in India exemplifies this strategy, emphasizing the importance of localized production for meeting market demands effectively.

Tricia Carey, Chief Commercial Officer at Renewcell, emphasizes the significance of geographical diversity in serving the evolving needs of brand partners. By offering end-to-end manufacturing solutions tailored to specific regions, Renewcell aims to drive continuous development and promote sustainable practices throughout the industry.

Renewcell's commitment to sustainability extends beyond its supplier network, with a mission to replace virgin manmade cellulosic fibers and enhance the properties of recycled cotton. With Turkey emerging as a focal point due to its significant cotton textile market, partnerships with mills in the country play a pivotal role in advancing these efforts.

The Circulose Supplier Network embodies the collaborative spirit necessary for building a circular system in the textile industry. Karla Magruder, Founder of Accelerating Circularity, underscores the importance of such initiatives in driving the transition towards circularity and facilitating market scalability.

With 151 members now part of the network and Circulose gaining traction throughout the value chain, Renewcell paves the way for economies of scale in sustainable textile production. Brands, both large and small, can now access fibers, yarns, and fabrics made with Circulose, marking a significant step towards a more sustainable future for fashion and home industries.

Slated to be held from June 04-08, 2024 at the Istanbul Tüyap Fair and Congress Center, the ITM 2024 Exhibition, promises to be a cornerstone event in the textile industry. 

Centered on the theme ‘Discover the Future,’ the event will showcase the latest advancements in textile machinery and technologies from over 1,200 domestic and international companies, attracting thousands of qualified buyers. It will foster innovations, facilitate new business connections, and shape the textile landscape of tomorrow.

With an aim to highlight innovative, nature-protecting, and pioneering digitalisation technologies geared towards sustainability, the trade fair will showcase a diverse array of products and services spanning weaving, knitting, yarn, digital printing, finishing, and denim technologies. Company owners will have the opportunity to engage with experts, gather insights on cutting-edge technologies, and chart the course for their future investments and product development.

ITM 2024 serves as a catalyst for the textile machinery sector's growth, fostering new investment decisions and partnerships worldwide. This year, the event is poised to attract global investors and delegations from textile-active regions like Pakistan, Bangladesh, Uzbekistan, India, and Egypt.

Responding to increased demand, the ITM Team has expanded the exhibition space, increasing the number of halls from 12 to 13. This expansion accommodates returning exhibitors who seek larger stands and welcomes new participants, enabling them to showcase a wider range of offerings.

A highlight of the event is the 'Denim Technologies Special Section,' relocated to Hall No. 11A to facilitate proximity to related sectors like dyeing and finishing. This section will showcase sustainable innovations and cutting-edge technologies in denim production, providing invaluable insights for buyers and brands seeking eco-friendly solutions.

For convenience, the trade fair has implemented an online invitation system that allows visitors to register easily via the ITM 2024 website. Upon completing the visitor information form, applicants receive an e-invitation via email, granting expedited access to the exhibition.

Pakistan’s leading textile exporter Interloop recorded a 115 per cent rise in profits amounting to to Rs 9.86 billion during the H1FY24 ending on December 31, 2024.

 The company's net sales surged by nearly 40 per cent to Rs 73.98 billion during the first half of the fiscal year 2024 (1HFY24), compared to Rs 52.92 billion in the preceding year. Interloop’s gross profit surged by 66 per cent to Rs 22.63 billion during the period. Consequently, the company's profit margin rose to 30.6 per cent, compared to 25.8 per cent in same period last year. 

However, operating expenses saw a significant rise of over 40 per cent Y-o-Y, totaling Rs 8.14 billion in 1HFY24. Notably, the company experienced exponential growth in 'other income,' reaching Rs 332.32 million in 1HFY24, compared to just Rs 15 million in same period last year. Conversely, the cost of finance increased to Rs 4.8 billion in 1HFY24, representing an 85 per cent surge due to significant increases in interest rates during the year.

As a result, the profit before tax increased by 107 per cent to Rs10.88 billion in 1HFY24, compared to Rs 5.26 billion in corresponding period last year.

Established in 1992, Interloop became listed on the country's stock exchange in 2019. The company operates as a vertically-integrated, multi-category firm manufacturing hosiery, denim, knitted apparel, activewear, and producing yarn for textile customers. It is one of the largest exporting firms in Pakistan and ranks among the largest listed companies on PSX.