Finally the Government Wakes up To Downfall?
After a long hibernation to problems related to downfall of the Indian economy finally
the moment has come when the Government has realised that if mandatory steps will
not be taken immediately all the important industrial sectors will not sustain. After
taking away MEIS scheme the Government has now come up with Remission of Duties
or Taxes on Export Products (RoDTEP), a new scheme announced by FM Sitharaman
which will replace the premier Merchandise Exports from India scheme (MEIS) for all
goods exported. Exporters earn duty credits at fixed rates of 2 per cent, 3 per cent and
5 per cent, depending upon the product and country. Officials said the rates are yet to
be decided in the new RoDTEP scheme but it will be based on previous method.
While FM must be happy announcing a number of new schemes to safeguard textile
and apparel industry the industry reacted differently and claimed it to be a small
relief in a big catastrophic condition. Most of the players our team interacted with
complained that changing policies randomly does not help but affects business in a big
way especially exporters who take orders well in advance and by the time the
payment time comes the policy is changed and altered

INDIA LOSING EDGE IN EXPORTS…
If we look at last year’s apparel export figures is chastening. China exported $145 billion, Bangladesh $36 billion, Vietnam $33 billion and India a mere $17 billion. India is far behind China and steadily losing to smaller countries. The biggest reason is India’s near absence from the main product category that accounts for 70% of world trade in apparels – synthetic apparels. Unsurprisingly, synthetics have overtaken cottons and become favourites of the fashion industry.
Indian units still run only six months a year to produce cotton apparels. In the remaining six months, most units are shut or run at a low capacity as they do not have orders for synthetics/ winter wear. Also, a factory that runs only six months a year still has to pay the full year’s fixed costs – rent, salary for minimal staff, interest on loans, etc. This makes anything made in the factory expensive.
So is it only the product category working on which will bring results for India, I don’t think so. As combination of technology, efficiency, product mix and cost is what drives a business and this holds true for garment exports also. While favourable policies support the business it is also calculations made on basis of all expenses and also have combination of all mentioned above.

Digital printing continues to make inroads into the conventional printing business. The transactional printing, label and wide format fields have long been key markets for inkjet printing, and digital printers are setting their sights on other long-standing conventional printing markets.
In this issue of PERFECT SOURCING our team interacted with digital textile printing machinery manufacturers and companies using the technology to enhance capacities in printing fabric. Though the market has seen a very good growth over the last few years still the companies have inhibitions to invest huge money in digital printing because of less knowledge in the field and also confusion on what technology to adopt?
In this cover story our team has attempted to find out various factors one should keep in mind for going in for digital printing and also interacted with companies offering technology to understand areas like return on investments, ink cost, print heads and running cost of the machines. While investing on high speed and high volume technology it is important to gauge the running cost of the machine which depends on many factors like print run, monthly demand, electricity consumption, ink cost, operator cost, maintenance cost(after 1 year) of installation, importing and buying cost, selling cost of fabric, wastages, consumption of water, loan interest and so on the basis of all these one can roughly calculate the per square meter cost of printed fabric.
This way any company can analyze that in how many months one can get ROI and reach breakeven or profitability in business. The calculations are more important if you are going in for big investment like single pass machines of high speed machines.

ITMA AN INNOVATIVE SHOW CLOSES..BUT IS INDUSTRY READY TO ADOPT
CHANGES
Themed ‘Innovating the World of Textiles’, the 18th edition of ITMA, the world’s most established textile and garment technology exhibition, concluded successfully in Barcelona, Spain. ITMA 2019 attracted visitorship of over 105,000 from 137 countries. The top 5 countries where visitors came from were Spain (11%), Italy (10%), India (8%), Turkey and Germany (7%). They were followed by France, United States, Portugal, Brazil, Pakistan, China and the United Kingdom.
Team PERFECT SOURCING which was at ITMA Barcelona, A lot of textile and apparel manufacturers from India also came at the show. Teams of Pratibha Syntex, Shahi Exports, Bombay Rayon, Reliance Industries and many more leading companies were seen looking and exploring the latest technologies in weaving, processing, finishing, cutting, software, data management and many more.

India’s apparel exports have fallen for two years in a row. Estimated at $16.2 billion in FY19, the country’s apparel exports fell by 1.2% from FY18, which in turn was 4% lower than the previous year. This comes after annual average growth of 5.7% between FY10 and FY16. The reasons for the slowdown range from issues on the domestic front to slackening global demand, overall slow market scenario, fall in demand for fashion and more demand for garments with value.
There are other reasons for the decline. According to CARE Ratings Ltd, “India’s apparel exports comprise mainly of cotton garments (51%), with manmade fibre accounting for around 28%. India needs to diversify its fibre base, as global consumption is diversified and MMF (man-made fibre) holds a much larger share as compared to cotton. Read More at www.perfectsourcing.net

FIVE YEARS OF GOVERNANCE…

DID APPAREL EXPORT INDUSTRY GAIN OR LOSE?
With the upcoming elections five year tenure of current NDA led Govt comes to an end
and it is important to analyse what did the industry gain or lose during these years.
To attempt this, Team PS not only spoke to industry players on what has been the
outcome of schemes, policies and decisions of the government that were taken during
this time period, but also we give you the gist of all the schemes and polices that were
announced. With some of the major steps like Demonitisation, GST and reduction in
drawback rates industry was surely affected and it still trying to cope up with
pressures of all these major steps.

Master stroke of Govt before elections
Will industry gain benefit ????
Indian Union Cabinet finally announced their approval of the Scheme to Rebate State
and Central Embedded Taxes to support the textile and apparel. The scheme will
enable the Government to take various measures for making exports of apparel and
made-ups zero rated in order to help the exporters in terms of their competitiveness.
Textiles Secretary, Raghvendra Singh shared that the decision was needed as
incentives for apparel and made-ups under the Merchandise Exports from India
Scheme (MEIS) were not WTO compatible anymore beyond 31st December, 2018.
Apparel and made-ups segments are already supported under the Scheme for Rebate
of State Levies (RoSL). Under RoSL, the Centre gives garment exporters refunds
against all the levies they shell out at the state level.
Read More on www.perfectsourcing.net

Apparel Export Promotion Council (AEPC) has reviewed the export performance of Apparel Export Industry and it seems, the exports for the period April – December, 2018 is US$ 11350 mn, which is a negative growth of 8.35 % of corresponding period in the last year. Also, the total exports for 2018-19 is estimated and likely to be US$ 16650 mn which indicates flat growth as compared to last fiscal. While the growth of Bangladesh is increasing, Vietnam is eyeing USD40 bn in garment exports; India is still not able to reach new export targets, what is the reason for this? Is it only because of Govt. or policies or is it also because industry is moving away from the business? Read More on our website: www.perfectsourcing.net

RIGHT TIME FOR INDIA TO MOVE TOWARDS NEW PRODUCT CATEGORIES
It has been quite ironic that despite the fast changing market scenario India is still dependent on natural raw material like cotton which is not only high in cost, prone to fluctuation and also creates a lot of pollution. As of now the demand for cotton is high but other fabrics made out of man-made fibers is also catching up in demand and that too in all product categories be it ladies or men’s wear. Active wear is the largest user of man-made fibers mainly because it requires functional properties. In this issue, you will read about MMF industry in India, its major players like Reliance Industries Limited, Aditya Birla Group, Bhilosa Group, and many others. Also, we talked to players in the biggest MMF hubs of India like Surat and Ludhiana on demand and supply of MMF in Indian and international arena.

A tumultuous 2018 draws to an end…will 2019 bring back lost glory?
We are now in the last month of this year, a year which was turbulent in many ways as business did not give returns as expected. The government also played smart by revising the duty drawback rates in the nick of time as elections are just around the corner. A lot of new schemes were launched, the latest being the 59-minute loan portal to enable easy access to credit for MSMEs for a loan up to Rs.1 crore. But when our team interacted with exporters on the same, none of them responded positively; instead, they said that rather than schemes, the industry need reforms that can add ease to business. Post GST, the problems have only increased for exporters especially for people at the small and medium end. The market is very slow and the exports are going down due to lack of demand of Indian products in the global market. Buyers from the US are pulling out because of the restrictions and the Govt. is well aware of the dissatisfaction of exporters. With upcoming elections these policies are being announced to please MSME’s which have existed for many years.

The grass is always greener on the other side…

You must be thinking why such a heading for my editorial post Diwali when people and industry have just got over with celebrations and fun filled period. This is because when we as an individual, as a entrepreneur or as a professional see others we tend to feel that we are less privileged. For instance, exporters in India are always envy of Bangladesh, China or any other country because of the advantages they have in their respective countries and the growth they are seeing over the last few years. However, as per the latest information available Indian apparel and textile exporters are seeing a good growth mainly because of the dollar and rupee crisis. The Indian currency has weakened by about 8-9% since the start of the year against the US Dollar. The depreciating value of the currency acts as a direct subsidy for exports while acting as a punitive tax on imports. Also, the undervaluation doesn’t fall foul with the regional or multilateral agreements in the way export subsidies do. In simple words, a weaker rupee has lent some competitiveness to India’s ailing exporters because it makes products cheaper for the buyers in dollar terms.

Can Labour wages break or make an industry?
The foremost aspect that affects garment production is the cost factor, which depends on many variables like raw material, machinery, logistics and the wages of workers.
Apparel production, spread out all over the world, has been facing issues in handling manpower as, with upwardly mobile economic conditions, the demand for an increase in wages must also come up. No matter which manufacturing hub it is, all have been facing issues related to wages. In fact, garment production over the years has shifted from countries like the US and EU to China and other low cost SE Asian countries namely, India, Bangladesh, Vietnam and Cambodia and is now expanding to Myanmar and Indonesia because of wages. In this issue of PERFECT SOURCING you will read about the factors affecting wages and an analysis of all named countries in terms of wages.
Moreover, you will read about Bangladesh, which is in the news these days because of unrest in their workforce as they too demand higher wages. Our team has also analysed the impact of the overall increase in wages on India, as it will definitely bring some business back to India which it had lost due to the wage factor impacting costs, which were higher as compared to Bangladesh and which were steering buyers to our eastern neighbor.

CAN DOLLAR FLUCTUATION AND US AND CHINA TRADE
WAR BRING BACK GLORIOUS DAYS?
As the dollar index rose to its highest level, crossing Rs 70 mark, exporters anticipated
a positive impact whereas, the importers are worried as the raw material, like fabrics,
accessories and machines coming from other countries, will now be available at
higher prices. According to Motilal Oswal report, rupee fell to fresh record low levels
primarily on back of surge in global crude oil prices and on expectation that higher
crude oil prices will start hurting India’s import bill. Major Asian as well as emerging
market currencies remains under pressure and that also is weighing on the rupee.

As far as the apparel trade is concerned it is observed to be coming back on the growth
trajectory with an estimated growth of 4-5% in the first half of CY2018 and 2% in
CY2017 in US dollar terms. The positive trend in the global apparel market is being led
by the strong recovery in apparel imports by the European Union (EU), which
accounts for two-fifth of the global apparel trade, it added.

Changing Trends in Apparel Fashion Drives Demand for Digital Printing
The apparel industry is now moving into a new dimension with increasing demand for digitally printed fabrics and apparels mainly due to fast changing fashion. With the start of era like ‘buy what you see’ the manufacturers are looking for faster delivery of goods. In such a situation, digital printing machines which are capable of creating samples in shortest possible time is the need of hour. Since digital machine requires less workers to operate, water consumption and maintenance the demand is thus increasing not only in India but all over the world. You will read about latest technologies, trends, and intricate details on how to cash on fast fashion with the use of digital printed fabrics and garments.
In this issue, you will also read about latest innovations in yarns, fabrics and accessories which form the major part of apparel industry. Many companies are now working on sustainable fashion and accessories as internationally the demand for such products is very fast.

Sustainability Achieving New Scales Globally
Sustainability is the buzzword for many years but now the growth in the segment is reaching new dimensions because the GENZ and millennials all over the world have become highly cautious of what they wear and whether the garments that they are using are manufactured in right way and under right conditions.
Sustainability has become the focus of leading retail chains like H&M, Zara, Asos and many more as they have added separate shelves for such clothing at all the stores. The consumers are not only looking for value and fashion but, also want to track the complete cycle of product to find out whether the clothes they are wearing are made under good conditions without causing harm to environment and people.

When the world seems darker, when the tough times seize, that is the moment to
rethink and revolutionise for a better tomorrow. We have been talking about some
rough patches that have affected growth of textile and apparel sector of India over the
last few months. But as an individual I have always believed that when we worry
about problems and challenges too much they ought to distract us more; and divert us
from taking some real solutions.
For the top guns, there are always many ways and resources that can change their
situation or let them come out of the crisis; however, it is the small and medium sized
players who have limited resources and network and in such scenario they fear closure.

AUTOMATION THE ONLY WAY TO SUCCEED IN THE LONG RUN

This issue of PERFECT SOURCING highlights the need for automation and its growing importance in the apparel industry. While on the one hand, automation in the apparel industry has become the need of hour, especially with increase in labour cost and less availability of skilled labour, on the other it has become an extra burden on manufacturers as most of the automatic technology available is expensive and getting a return on investment for the same is not an easy task.
In this issue we have highlighted areas of automation and their usefulness in saving
time, money and resources. Alongside, we spoke to many production experts on how
automation has proved in terms of attaining results and the success rate in achieving
desired results. While most technology suppliers assure us that it is one of the most
reliable ways of reducing overheads, the users of this technology feel that complete
automation has its own glitches, but with the increasing cost of labour, there is no
option other than to rely on these automated technologies.

DEMAND VS SUPPLY…

You must be thinking why I have used such a title. My answer to this implicit query is
that ‘demand and supply’ is the most underrated subject within our industry, as for
many years, demand has not met supply. Be it fabrics required to make innovative
garments, cotton supply, skilled workers, schemes for betterment of business and their implementation, institutes that can fulfill the ever increasing quest for good talent and expertise, all remain a huge demand for the Indian apparel industry.

The change, however, is that a fresh perspective is coming in with the younger
generation getting into business. While for many years there were discussions on what the Government needs to do for the sector, the debate today is ‘what different can we do for our company?’… this approach, in itself, portends a big change. Read More.....

GST REFUNDS BECOME A HURDLE FOR EXPORTERS…
IS THE GOVERNMENT RUNNING OUT OF MONEY?
The after-effects of GST have still not calmed down as, even after a lot of
confusion, anger, curiosity and anguish over the new taxation scheme, matters remain in a state of chaos. The industry welcomed GST after a few hiccups and filed all GST returns as required; however, the problem now is getting the IGST refunds, which have been pending for almost a year as of date. While big exporters are still able to handle the situation, the medium and smaller ones are the worst affected. The cash crunch is hitting them hard and they are now anxiously waiting for these refunds to bankroll their business. The industry, as a whole, has been subjected to unprecedented hardship. As per an internal estimate, only 30 percent of the claims for refunds have been met so far. Also, there is a fear that as much as Rs. 1,85,000 cr could get stuck with the Government. Read More...

Is the Apparel Export Industry of India Really on the Verge of
Vanishing?
My heading this time seems to be quite strong, however, it is nowhere as strong as
needed to aptly describe the current situation of the Industry. While exports of all
other countries are increasing, the garment export industry of India is slowing down.
The revised rate of RoSL and duty drawbacks has affected most exporters and they
fear closures and unemployment on a large scale if the same are not rectified. I
sometimes ask myself if the industry is really going to end. Well, it cannot. No matter what, such issues are always cyclic; whether slow or fast is just semantics or simply a matter of time. During this tumultuous phase, I have almost spoken to all types of exporters, big, small and medium and, for the first time, none of them is happy or shares a mixed reaction about the current situation. The environment of uncertainty is definitely engulfing all.

Rather than reminiscing about 2017, I would like to highlight some of the noteworthy figures revealed after a recent survey conducted for the apparel and textile industry by the well-known consultancy, Wazir Advisors. I do so primarily because initial indications seem somewhat paradoxical, in that there is a spark of light at the other end of this dark tunnel most of us are unhappy about.

73 per cent of the respondents to the survey said that demand as well as profit in the textile and apparel industry had decreased during the initial months of of GST
implementation, while almost two-thirds reported an increase in unemployment.
Manufacturers reporting lower demand thus indicate a depletion of stocks in the
supply chain. The impact of GST on input cost did not have a clear-cut trend as 33 percent said the input costs had decreased while 47 per cent said that they had increased.

GROWTH OF ATLESIURE IN INDIA AND INTERNATIONAL MARKET
DEFYING ALL NORMS
This issue of Perfect Sourcing brings to you detailed information on the athleisure  category of apparel, a product which has comfort, style, functionality and can be worn while at the gym or in office. The interesting aspect about the category is that
internationally innovative ideas are being launched by mid to high-segment brands to make athleisure enter the most wearable category across the young, old and middle aged population. In India also, there is a growing trend for athleisure, as a result of which many cricketers like Virat Kohli, Bollywood actors like Hrithik Roshan, Shahid Kapoor, Jacqueline Fernandes and Milind Soman have launched their exclusive lines of athleisure. In fact, now textile companies like Monte Carlo, Sangam India and many export oriented units like Paragon Apparels have got into the category and are eyeing a bigger share with an exclusive yet affordable range. Read More....

Post Diwali, last quarter of the year, a new era of taxes and rules has made apparel
industry reach new trajectory. So far optimistic, the players are defying the
challenging times with complete faith on themselves and their own product driven
specialty. Many believe that the phase is a learning experience for many
entrepreneurs as now they will work even harder to work in a cost efficient manner.
From fibre to garment phase, everyone is now working on sustaining the tough times
and leading ahead with change. Read More...

SEASON OF FESTIVALS BEGINS, BUT TROUBLES CONTINUE
We are now in the last quarter of the year and despite all odds, everyone is still fighting strong. Post demonetisation and GST, the business environment has undeniably been affected and chaos rules the market. Right from yarn to garmenting, every individual in the supply chain seems confused about the new taxation system.
If we talk about exporters, their immediate and palpable concern is duty drawback
rates, which are on the verge of a drastic decline, as a result of which they are not
thinking of adding capacities but just focussing on sustaining themselves. This in turn
has impacted machinery importers who are not getting orders for new machinery.
According to them, only those exporters who are in middle of expansion are buying and there too, payment delay is rampant. Private sector investment has collapsed and the economy is running on just the one engine of public spending. The most worrisome aspect of all this disarray is the impact on job creation. Jobs have been extremely hard to come by for the youth of the nation. The engine that was running at full steam has suddenly lost pace, which is clearly reflected in the drop in GDP.

GST IN, BUSINESS OUT? SLUGGISH PERIOD IN INDUSTRY
BECOMES A CONCERN FOR EVERYONE…
The after effects of GST, the implementation of which caused business to slow down
in the last two months, are beginning to show. Export houses, fabric manufacturing
companies, job workers, accessory and machine suppliers- all were busy in
changing and understanding the systems implemented.
Orders were stuck and purchase orders remained on hold; confusion engulfed the
minds of all industry players as they strove to find the best way out of this problem.
Read More...@www.perfectsourcing.net

APPAREL EXPORTS ON VERGE OF DECLINE? DO WE NEED ONLY DISCUSSIONS OR ACTION?
The past one month was a very turbulent one as ever since the GST was rolled out there were nationwide protests across the country especially in all textile and fabric clusters like Ahmedabad, Surat, Erode, Tirupur, Ludhiana, and many more.
The confusion about GST structure, the clauses, paperwork, refunds, drawbacks and 5% GST on fabrics was condemned by entire textile and apparel industry which is already going through a rough patch due to increasing competition and lower margins. The biggest setback for the industry came in when the Govt announced new taxation policy for drawback rates. Read more...

Bandh, Strikes And Confusion Stir Nation On The Eve Of GST Implementation

We are in the midst of one of the most awaited and controversial moments of the Indian economy. With implementation of GST looming large, there is chaos in our apparel and textile industry and despite so many discussions and debates between the Government and industry, there seems to be no end to this issue. Lack of clarity on GST on textiles has complicated matters for the trading industry, involving lakhs of micro-entrepreneurs and the traditional industry practice of long-period credit and return of goods, trade body officials vociferously state. As a result, protests and ‘bandhs’ are being held in major textile hubs nationwide, like Ahmedabad, Surat, Rajkot, Delhi, West Bengal, Telengana and more. Traders feel that GST should be deferred for the textile sector for at least for a year till everyone in the eco-system is given a fair chance to prepare for what will be, to say the least, a lengthy period of trial, travail and tribulation.

Texprocess 2017 Concludes. . .
Gives Insights to the Future of the Apparel Industry
Texprocess, one of the largest shows for apparel machinery recently held concurrently with Techtextile, drew its curtains at Frankfurt, Germany. Among the top highlighted trends was the concept of 4.0, clearly evident at most booths. 4.0 synchronises all operations in the entire value chain which are connected digitally, allowing autonomous factories to build products tailored to individual consumers’ needs. Internet-enabled chips equipped with sensors are embedded at every stage of the process, making rich streams of vital information available in real time. The 4.0 concept is a superlative tool to monitor performance of machines, factories or individuals. Smart phones are today an inescapable part of our lives and its wondrous capabilities are now being utilised in the apparel industry to review performance, analyse results and take the business to new zones.

Hardening of Rupee & Increasing Raw Material Prices Puts Industry at Crossroads…

The months of April-June are usually a lean period for the apparel industry and garment exporters prepare themselves for slow business and fewer orders. However, what they are not prepared for is losing out on orders already executed because of rupee appreciation and increasing raw material prices. There is no doubt that the Indian economy is a magnet for entire world; seeing strong Governance and a stable economy, everyone is looking at India with a lot of confidence and trust. Download & Read More...

Jharkhand Inviting Apparel Manufacturers to Set Up Base…
Is the Industry Geared for the Same?
The apparel manufacturing industry in India that has faced a lot of global competition mainly in terms of prices from countries like Vietnam, Bangladesh, China and several others can expect some relief in the ongoing situation if implementation of the policy inked by the State of Jharkhand proves successful. As of now, the policies and subsides being offered to garment manufacturers look very attractive and could well chart a good roadmap for the future of garment exports from India. It would, however, be folly to expect an easy saunter down the garden path as there will be many challenges to be overcome, some of which can be forecast and catered for and others that are as yet imponderables and will pop up out of the blue calling for quick innovative solutions. Only time will show he extent to which the vision and dream of that state government bears fruition. Read More....

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The leading publication for the Indian export textile & apparel Industry.The magazine is distributed free of cost at more than 30 national and international B2B fairs and exhibitions related to apparels, home textiles, hard goods, denims, machinery and, accessories. We have a good presence at industry conferences, seminars, symposiums, etc.With a circulation of 27,000 copies every month we offer you the opportunity to be in front of approx. 30,000 potential clients who are either the Chairman, MD’s, CEO’s CFO’s COO’s, Owners, production and merchandising teams in textile, home textile, fabric, testing, apparel, floor coverings, handicraft, rugs and retail market of India, who make decisions on company’s behalf.

September 2013

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