IBTEX No.

196 of 2023 November 08, 2023

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INTERNATIONAL NEWS
No Topics
China’s strangle-hold over global garment exports frustrates
1
many brands
2 UK's retail sales surge 2.5% in October 2023: BRC

3 ICAC projects global cotton reserves to reach all-time high

4 China's foreign trade sees slight uptick in Jan-Oct 2023

Korea Importers Association, FBCCI sign MoU to boost

5
bilateral trade
Bangladesh may lose, China regain RMG export orders:
6
QIMA study
Texworld LA & Apparel Sourcing LA 2024 edition to be held
7
on Aug 13-14

8 Is AI the Key to Sustainability in Fashion?

Vietnam clears project to develop waterways, logistics in

9
south
What is the cost of Africa’s continued reliance on raw cotton
10
exports?

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Indonesia Launches Investigation On Safeguarding Cotton

11
Yarn Products From Vietnam
Study says Bangladesh may see decline in apparel export
12
orders; increased sourcing from China likely

NATIONAL NEWS
No Topics
India taking up EU carbon tax issue with WTO, onboarding
1
other countries for support: Goyal
UK PM Rishi Sunak likely to visit India as and when FTA is
2
ready to be announced
Walmart on track to meet $10b annual exports from India
3
by 2027, says sourcing head Andrea Albright
SEZs should be allowed to sell goods in domestic market on
4
payment of duty foregone on inputs: GTRI

5 Indian cotton production to be 6% lower this year

6 Open-end spinning mills halt production

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INTERNATIONAL NEWS
China’s strangle-hold over global garment exports
frustrates many brands

Since 2016, China has been seeing a slow but steady downgrading of its
status as the world’s number one exporter of consumer goods as its share
declines. One reason could be increasing labour costs are pushing Western
importers to look at more lucrative manufacturing hubs, particularly in
textiles and apparel. For decades, China has been the world's factory,
churning out cheap products for the masses. However, the tide is turning,
as many companies are looking to shift their manufacturing operations
away from China.

China has already lost ground in key consumer categories, including

clothing and accessories, footwear, furniture, and travel goods, while also
seeing a decline in its share of exports from minerals, hardware to office
technology. However, in reality the geo-political tensions that have driven
a growing wedge between the US and its Western allies against China is
the main reason. Coupled with this the disruptive supply chain experience
buyers faced when the Chinese government imposed a severe pandemic
lockdown.

The painful breaking away journey

While the breakaway from China was on a big high from 2020 as the
Chinese forced a nation-wide pandemic lockdown and the Biden
administration kept issuing warnings about sourcing from the country,
the reality is it has been an arduous journey for many brands. Brands are
questioning their decision to have left and many are hoping to renegotiate
and return their manufacturing to China.

Speaking to a reputable online business platform, Laura Magill, Global

Head of sustainability at footwear brand Bata Group, explained she
couldn’t think of another place that can do the quality, quantity and price
as well as China. The mature Chinese ecosystem, established over decades
of hard work, not only ensures competitive price points but also delivers
stable quality at mass production that’s hard to copy.

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So where does that leave the likes of Adidas AG and Nike Inc. as garment
and footwear manufacturers have been relocating their supply chains
away from China, driven by geopolitical concerns and drawn by reduced
production costs? Will they find their new hub up to their satisfaction?

New Asian manufacturing hubs continue to rely on China

Vietnam is a classic case in point. While it has gained considerable ground

in terms of upping its garment export game at the expense of China, it is
still not entirely independent of Asia’s biggest economy. Vietnam’s
clothing industry still relies mostly on Chinese materials such as buttons,
thread, labels and packaging with only about 30 to 40 per cent of the
materials made locally, points out Duong Thi Ngoc Dung, Vice
Chairwoman, Vietnam’s Textile & Apparel Association.

Dung however explains, Vietnam is still targeting apparel exports worth

$40 billion this year, as some Western clients are emphasizing their
decoupling with China under political pressure from the US. This has led
to a significant gain for the Vietnamese apparel exports that touched $18.6
billion in the first half of 2023, contributing about 11 per cent to Vietnam’s
overall exports.

However, Vietnam still finds itself in a bind – it has tried investing in and
creating textiles that meet the sustainability benchmarks for the EU but
the same EU customers are demanding the products be priced as cheap as
the Chinese variant which is not possible due to economies of scale the
bigger manufacturing hub enjoys.

A Vietnamese mill-owner in Laskau put it succinctly that Western brands

not only have a much higher comfort level working with Chinese
manufacturers but also don’t have the intent of investing in developing
alternative manufacturing hubs.

Source: fashionatingworld.com– Nov 07, 2023

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UK's retail sales surge 2.5% in October 2023: BRC

UK’s retail sales increased by 2.5 per cent in October 2023, surpassing the
1.6 per cent growth observed in October 2022, according to the British
Retail Consortium (BRC) Retail Sales Monitor. Despite this growth, the
retail sector's performance fell short of the three-month average of 3.1 per
cent and the 12-month average of 4.2 per cent.

Over the three months leading up to October, non-food sales saw a

decrease of 1 per cent on a total basis, a number that lags behind the 12-
month average growth of 0.6 per cent. Specifically, in the month of
October, the non-food sector continued its year-on-year decline.

Physical retail outlets for non-food items experienced a minor contraction,

with in-store sales dropping by 0.1 per cent on a total basis since October
2022. This decline is a noticeable deviation from the 12-month average
growth of 3 per cent, as per BRC.

Online non-food sales also faced a downturn, decreasing by 2.5 per cent in
October, though this was less severe than the 6.3 per cent decline recorded
in October of the previous year. However, this decrease was more
pronounced than the 12-month average decline of 2.9 per cent.

The penetration rate for non-food items dropped slightly to 36.5 per cent
in October from 36.6 per cent in October 2022.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium,

said:

“Retail sales growth slowed as high mortgage and rental costs further
shook consumer confidence. Many households are also delaying their
Christmas spending in the hopes they can grab a bargain in the upcoming
Black Friday sales.

The cost-of-living squeeze meant more was spent on lower-price

indulgences. Meanwhile, the arrival of some colder weather helped to
boost fashion sales, particularly for outdoor wear,” said Helen Dickinson
OBE, chief executive of the British Retail Consortium.

“Retail sales remained weak in October with growth of just 2.5 per cent.
Online sales continued to struggle, with negative sales growth recorded in

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every category other than health and other non-food. This could herald
the most competitive Black Friday period that we’ve seen in a while,” said
Paul Martin, UK head of retail, KPMG.

Source: fibre2fashion.com– Nov 07, 2023

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ICAC projects global cotton reserves to reach all-time high

The International Cotton Advisory Committee (ICAC) projects global

cotton reserves will reach the highest level ever recorded in its 83-year
history of data collection, with China’s 23/24 stocks expected to rise to
9.16 million tonnes.

For the 2023–2024 growing season, it is projected that global cotton

production would increase by 3 per cent to 25.41 million tonnes, while
consumption will fall by 0.43 per cent to 23.35 million tonnes.

Because of this, global cotton inventories are expected to rise by 10 per

cent after increasing by 9 per cent in the previous growing season (2022–
2023) to reach 23.32 million tonnes.

There will be a significant excess of cotton production on the global

market, as China anticipates a significant increase to 9.16 million tonnes,
while the rest of the world’s warehouses are predicted to swell to 14.5
million tonnes.

The Cotlook A-Index, which attempts to be a good representation of the

range of offering prices on the global raw cotton market, is expected to be
impacted by the excess. For the remainder of the 2023–2024 season, it is
predicted to stay between US $ 0.85 and US $ 0.95 per pound.

It is projected that the global stock-to-usage ratio will rise to 1.00, or

roughly a full year’s worth of mill use. In addition, it is anticipated that the
average production globally for the 2023–2024 season will stay at 771 kg
per hectare.

Although the ICAC notes that some drops in planted area would be
expected given average cotton prices and declining demand, the overall
predicted planted area is expected to be 32.2 million hectares, a
“perplexing” 2 per cent increase over the previous season.

Source: apparelresources.com– Nov 07, 2023

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China's foreign trade sees slight uptick in Jan-Oct 2023

China has witnessed a slight uptick in its trade figures for the first ten
months of 2023, with the nation's total goods imports and exports
recording a marginal year-on-year increase of 0.03 per cent, reaching
34.32 trillion yuan (approximately 4.78 trillion US dollars), as per the
General Administration of Customs.

The period from January to October showed China's exports experiencing

a modest growth of 0.4 per cent, resulting in 19.55 trillion yuan. On the
flip side, the country’s imports indicated a minor pullback, decreasing by
0.5 per cent to 14.77 trillion yuan compared to the same period last year.

The month of October marked a positive note with foreign trade climbing
0.9 per cent to 3.54 trillion yuan.

Source: fibre2fashion.com– Nov 07, 2023

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Korea Importers Association, FBCCI sign MoU to boost

bilateral trade

The Korea Importers Association (KOIMA) and the Federation of

Bangladesh Chamber of Commerce and Industry (FBCCI) recently signed
a memorandum of understanding (MoU) to strengthen trade and
investment relations.

South Korea has recognised Bangladesh as a highly promising investment

destination, said FBCCI senior vice president Mohammad Amin Helaly at
the signing ceremony.

Korean investment in Bangladesh substantially increased after a special

export processing zone was set up exclusively for South Korean investors,
he said, adding that FBCCI has set an export target of $300 billion by
2041.

Helaly and KOIMA chairman Byung-Kwan signed the MoU in Dhaka in

the presence of Tapan Kanti Ghosh, senior secretary in Bangladesh’s
commerce ministry, and South Korean ambassador to Bangladesh Park
Young-sik, according to media reports in Bangladesh.

Bangladesh and South Korea are celebrating 50 years of their bilateral ties.
The former crossed $55 billion in exports to the latter in fiscal 2022-23.

South Korea is the fourth largest in Bangladesh in foreign direct

investment, with a total stock of $1.48 billion till June this year. More than
200 South Korean companies are operating in Bangladesh now.

Helaly also urged South Korean companies to explore joint ventures, and
subcontracting arrangements with companies from his country, especially
small and medium enterprises.

Source: fibre2fashion.com– Nov 07, 2023

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Bangladesh may lose, China regain RMG export orders:

QIMA study

For the first time since 2019, the inspection and audit demands by western
apparel buyers in Bangladesh declined by 10 per cent year on year (YoY)
between January and September this year, while rising by 14 per cent in
China, according to a new report by Hong Kong-headquartered quality
control and supply chain audit company QIMA.

Global apparel brands and retailers are pushing for higher sourcing from
China and lower from Bangladesh, it noted. US-based buyers, in
particular, appear to be scaling back textile and clothing sourcing from
Bangladesh, it said.

Bangladesh’s Export Promotion Bureau data also revealed that the

country’s garment exports in October this year saw about 14 per cent YoY
decline to $3.16 billion, monthly lowest since August 2021 when the sector
earned only $2.73 billion.

Interest in China sourcing may be picking up again among the US- and
EU-based buyers - in the first nine months of 2023 - the relative share of
China in their supplier portfolios has increased for the first time since
2019, according to the report.

As consumer spending in the West is slowing down due to fears of

economic downturn, brands and retailers may be prioritising China as a
supplier again, to leverage the benefits of its well-established
manufacturing infrastructure, the report noted.

The QIMA report, however, suggested that Bangladesh should diversify its
supplier offering to protect its exports from future shocks. "The country's
apparel industry, which is currently heavily cotton-oriented, can benefit
from branching out into manmade textiles," it said.

Bangladesh holds 34.7 per cent share in the EU's cotton imports, whereas
its share for non-cotton garments is only 12 per cent. Besides readymade
textiles, there is a lot of potential in export of footwear, leather and home
textiles, it noted.

Source: fibre2fashion.com– Nov 07, 2023

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Texworld LA & Apparel Sourcing LA 2024 edition to be

held on Aug 13-14

Texworld Los Angeles and Apparel Sourcing Los Angeles, leading fashion
textile and apparel sourcing platforms, have announced the dates for their
2024 edition. Following the triumphant debut in 2023, Texworld Los
Angeles and Apparel Sourcing Los Angeles are gearing up for another
impactful event.

The co-located premier sourcing event will return to the California Market
Center (CMC), taking place on August 13-14, 2024, offering industry
leaders, designers, and buyers an unparalleled opportunity to explore the
latest trends, innovative materials, and sustainable practices, organiser
Messe Frankfurt said in a press release.

As the fashion industry continuously evolves, Texworld and Apparel

Sourcing Los Angeles are committed to providing a platform that keeps
pace with these changes.

Just like the debut event, the 2024 edition will feature an extensive range
of fashion textiles, apparel, accessories, local sourcing resources, and
more from countries including South Korea, Peru, China, the US, India,
Turkiye, and more.

Attendees can once again look forward to engaging seminars and panel
discussions led by top industry experts, as well as an inspiring F/W 24/25
trend display, curated by NYC-based agency, Doneger | TOBE.

Show partners Printsource, Lenzing Fibers, and CCPIT-TEX will also

return and provide a unique and enriching dimension to the event in 2024.
Their continued involvement reinforces the industry’s collective
responsibility towards innovation, sustainability and education, and
global connection, added the release.

The topic of sustainability will also undergo a re-shape at Texworld events

as it aligns its activities with those of the textile trade shows within Messe
Frankfurt´s Texpertise Network. Under the new communicative umbrella
´Texpertise Econogy´, Texworld Los Angeles will provide advanced
orientation on sustainability for buyers.

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“Texworld Los Angeles and Apparel Sourcing Los Angeles were envisioned
to elevate the textile and fashion landscape on the West Coast. We were
delighted with the turnout and the positive feedback received from
participants.

The event’s success underscores the importance of such platforms in

fostering innovation, sustainable practices, and global collaborations,”
stated Jennifer Bacon, VP of Fashion + Apparel, Messe Frankfurt.

Source: fibre2fashion.com– Nov 07, 2023

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Is AI the Key to Sustainability in Fashion?

Artificial intelligence has become more than just a buzzword for most
fashion and apparel brands. Implementing the technology could be
necessary to help retailers and manufacturers keep up with changing
markets, trends and demands.

A number of startups in the industry have been using artificial intelligence

to solve unique problems in sourcing, product development,
manufacturing and traceability.

Lawrence Lenihan, executive chairman and co-founder of Resonance and

Jordan Zhang, chief technology officer and co-founder of Hyran
Technologies joined Jessica Binns, managing editor of Sourcing Journal
for a discussion focused around artificial intelligence’s potential impacts
on production as part of Sourcing Journal’s Nov. 2 Fall Summit.

Resonance helps its customers design, produce and track the progress of
made-to-order garments using AI. This means brands can produce less
waste caused by rampant overproduction. Lenihan said the technology
addresses the concern of brands having to rapidly adapt to trends and
fluctuating demand.
“It’s the problem of everything’s dynamic. And the complexity of dealing
with [being] dynamic is… how AI really will make its impact in the
industry,” he said.

Hyran Technologies uses artificial intelligence to assist brands with

holistic production planning, enabling them to reduce excess inventory
and optimize products and strategies with greater overall flexibility.

Zhang said Hyran brings together a number of data points, like forecast
history and accuracy, product descriptions and manufacturing
information, and uses its AI model to make a decision based on that intel.
“We bring that all together into a model, the goal of which is to say, at this
given point in time, what is the best possible action for all stages of my
supply chain… that minimizes the incremental risk that I’m taking on?”
Zhang said.

AI has reached a peak in its hype cycle due to the influx of conversation
and action surrounding generative AI since OpenAI’s launch of ChatGPT
in 2022. Lenihan said, unlike other technologies, he believes AI’s impact

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will continue to permeate the fashion and apparel industry, even if it

experiences a short lull in implementation, which many technologies, like
Web3 and the metaverse, don’t bounce back quickly from.

Both Hyran Technologies and Resonance lean on AI to ensure brands can

decrease the amount of unused or unwanted inventory they have, which
could be a key to better forward movement where ecologically responsible
production is concerned.

According to data from Fashinza, about 30 percent of the world’s apparel

is expected to never be sold. That waste often goes to landfills or ends up
polluting the global South. Lenihan said brands have to be better.

“Sustainability isn’t a feature—it’s a constraint on your business. You will

be paying for this one way or another. I don’t care if you’re indifferent to
what happens to the rainforest—you will be paying for it. And so you will
have to make it transparent; you will have to be accountable for it. And if
you’re not, it’ll cost you,” he said.

And Zhang said that in order to achieve better forecasting and production
models, companies need to change their structural architecture.

“A lot of people we speak to, seeing our AI DNA in our company say, ‘Well,
can you use AI to make forecasting better?’ … And our answer to them is
not if you do everything the same way you’re doing right now,” he said.
“Things have to change on the production side, to increase the amount of
agility and flexibility that is possible and reduce the amount of time it
takes to get the products and to make decisions. Otherwise, there is a
fundamental ceiling [on] the ability to forecast accurately.”

And though that kind of overhaul and rebuilding may take time to happen,
Lenihan said the fashion and apparel industry desperately needs to
evolve—and AI could be a productive way to move forward.

“This industry is broken. It’s the second most polluting industry on the
planet; nobody is making any money,” he said. “Optimizing little different
parts isn’t going to change this industry, it’s not going to change the
impact. You have to change completely.”

Source: sourcingjournal.com– Nov 07, 2023

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Vietnam clears project to develop waterways, logistics in

south

Vietnam’s transport ministry recently cleared a five-year World Bank-

funded $163.34-million (3.9-trillion VND) project to develop waterway
corridors and logistics in the southern region.

The project is aimed at improving the infrastructure system and reducing

congestion, accidents and the cost of transporting goods by waterway by
renovating and upgrading the East-West transport corridor connecting
the Mekong Delta region, and improving the North-South transport
corridor connecting the southeast region with the Cai Mep Thi Vai port
cluster, a domestic news agency said citing Duong Thanh Hung, head of
the Waterway Project Management Board.

Of the total investment, the World Bank loan capital is $106.96 million
non-refundable aid capital from the Australian government, $0.58
million.

Waterways will be dredged and improved to remove blockages on the

East-West corridor in Hau, Tra On and Mang Thit rovers and canals in
Can Tho city and Ho Chi Minh City.

It will also tackle congestion on the North-South corridor through Dong

Nai, Nha Be, Long Tau and other rivers.

Both the corridors can then accommodate large container ships and
connect better and faster with deep-water inland ports.

Source: fibre2fashion.com– Nov 07, 2023

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What is the cost of Africa’s continued reliance on raw

cotton exports?

Africa is one of the largest cotton producers in the world. 37 out of 54

African countries produce cotton, and the region accounts for about 20%
of the world’s cotton production. Cotton farming is a vital source of income
and livelihood for millions of Africans, especially smallholder farmers,
who cultivate it using rain-fed and crop rotation methods.

However, while African cotton fibre accounted for 7.5% of global

production in 2022, sub-Saharan countries exported more than 81% of
their raw cotton rather than transforming and using it locally. This
situation has several negative consequences for the continent’s economic
development and even its environmental sustainability.

Beyond Africa’s cotton fields

Cotton is a dynamic crop. It is the most widely used natural fibre for
clothing and apparel, as it is soft, breathable, durable, and easy to wash
and dye. Cotton can be woven into different types of fabrics, it can also be
blended with other fibres, such as polyester, rayon, or wool, to create
different textures and properties.

The global cotton textile and apparel market was valued at $1.1 trillion in
2020, making the industry one of the most dynamic and labour-intensive
sectors in the global economy.

Cotton is not only a source of fiber, but also a source of oil, seed, and lint.
Cottonseed oil is extracted from the seeds of the cotton plant and can be
used for cooking, baking, salad dressing, and margarine. It can also be
refined into biodiesel.

The residue left after the oil is extracted, known as the cottonseed meal,
can be used as animal feed, fertilizer, or protein supplement. The cotton
lint, the short and fuzzy fiber that covers the cottonseed, can be used for
making paper, cardboard, cotton swabs, bandages, and filters. According
to the World Economic Forum, the value of cotton lint is about four times
higher than that of seed cotton, and the value of finished garments is about
20 times higher than that of lint.

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The leftover material from cotton production known as cotton waste can
be recycled, reused, or converted into useful products, such as soap,
candles, mats, rugs, pillows, quilts, and insulation. It can also be
composted, fermented, or gasified to produce organic fertilizer, ethanol,
or biogas. The global cotton mill consumption is projected to grow by 1.3%
per year over the next decade, reaching 28.5 million tonnes in 2030.

However, Africa’s share of this cotton market is very low, as most of its
cotton is shipped to Asia, especially China, Vietnam, Bangladesh, and
Turkey, where it is used in the textile industry. The Asia-Pacific Textile
Market size is estimated at $381.47 billion in 2023, expected to reach
$432.69 billion by 2028.

In contrast, Africa’s textile and apparel industry is underdeveloped,

fragmented, and uncompetitive. Africa also produces about 2.5 million
tonnes of cottonseed, which is 5.8% of global production, yet only 75% of
the seed is crushed for oil and seed meal, and the rest goes unused. As a
result, Africa’s cotton value chain is truncated, and the continent misses
out on the potential income, employment, and export diversification that
could be generated from processing its cotton.

Unraveling the Cotton Paradox

One of the reasons why Africa exports most of its raw cotton rather than
transforming and using it locally is the lack of adequate infrastructure and
technology for cotton processing. Cotton is almost entirely cultivated by
smallholder farmers in Africa, with very few major plantations.

The African cotton processing market is constrained by high energy costs,

outdated machinery, low productivity, and poor quality standards.
Moreover, the African textile industry has since declined due to
competition from cheaper imports from Asia, especially China, which has
a large market share in the global textile and clothing sector. In recent
times, only Egypt has made efforts to revive its textile manufacturing
industry. Hence, Africa relies on exporting their raw cotton rather than
transforming and using it locally.

However, relying on merely exporting raw cotton exposes African

countries to the volatility and uncertainty of the global cotton market,
which is influenced by various factors beyond their control. These include
fluctuations in demand and supply, changes in consumer preferences,
competition from synthetic fibers, trade policies and subsidies of major

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producing and consuming countries, exchange rate movements, and

weather shocks. For example, during the COVID-19 pandemic, there was
a severe impact on African cotton producers, who saw their incomes and
livelihoods threatened by the collapse of the market. Moreover, the
dependence on raw cotton exports makes African countries vulnerable to
the concentration and bargaining power of a few buyers, who can dictate
the terms and conditions of trade and capture most of the profits.

Moreover, exporting raw cotton entails a significant loss of natural

resources and environmental services, as cotton production requires large
amounts of land, water, and inputs. Cotton is a thirsty crop, consuming
about 2,700 litres of water per kilogram of lint. In some regions, such as
the Lake Chad basin, cotton irrigation has contributed to the depletion and
degradation of water resources.

Cotton also uses about 6% of the world’s pesticides and 16% of the world’s
insecticides. These chemicals can have negative effects on human health,
biodiversity, and soil fertility and contribute to climate change. African
countries essentially export their scarce and valuable natural resources
without receiving adequate compensation or investing in their
conservation and restoration.

The economic implications of Africa not using its raw cotton locally are
significant. The African cotton processing market has the potential to
reach $7.34 billion by 2028, growing at a CAGR of 4.91% during the
forecast period (2023-2028). By exporting raw cotton, Africa loses the
opportunity to add value to its products and create more jobs and income
for its people.

Source: venturesafrica.com– Nov 07, 2023

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Indonesia Launches Investigation On Safeguarding Cotton

Yarn Products From Vietnam

On October 27, 2023, the Indonesian Trade Security Committee (Komite

Pengamanan Perdagangan Indonesia – KPPI) issued Notice No.
05/KPPI/PENG/10/2023, initiating an investigation into the application
of safeguard measures for cotton yarn products from Vietnam.

The Indonesian Textile Association (API) filed the request on behalf of

Vietnamese cotton yarn manufacturers urging the KPPI to initiate
safeguard measures against cotton yarn products from Vietnam.

The investigation follows Government Regulation No. 34 of 2011 (PP

34/2011) related to anti-dumping measures, compensation measures, and
trade remedy under the Decision of the Minister of Trade of Indonesia No.
85 of 2003 (Kepmenperindag 85/2003) concerning the investigation
request for protecting the domestic industry from the consequences of
increased importation.

The products under investigation include cotton yarn classified under HS

codes 5204.11.10, 5204.19.00, 5204.20.00, 5205.11.00, 5205.12.00,
5205.21.00, 5205.22.00, 5205.24.00, 5205.26.00, 5205.32.00,
5205.41.00, 5205.42.00, 5205.43.00, 5205.47.00, 5205.48.00,
5206.11.00, 5206.12.00, 5206.14.00, 5206.21.00, 5206.23.00,
5206.24.00, 5206.25.00, 5206.31.00, 5206.32.00, 5206.33.00,
5206.42.00, and 5206.45.00.

Case Details

During the period 2019-2022, the applicant's production decreased by

6.53%. In 2019, the production was 100 index points, dropping to 85.98
index points or 14.02% in 2020.

Furthermore, in 2021, the production increased by 5.59%, but in 2022, it

decreased by 78.41 index points or 13.63% compared to the previous year.
Experts attribute this decrease to reduced domestic demand due to an
influx of imported products saturating the domestic market.

In terms of domestic revenue, there was a 5.36% decline from 2019 to

2022. In 2019, domestic sales were 100 index points, decreasing to 85.44
index points or 14.56% in 2020. While domestic sales increased by 16.13%

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in 2021, they dropped to 79.19 index points or 20.19% in 2022 compared

to the previous year. The cause was identified as an overflow of imported
products dominating the domestic market.

In 2019, productivity was at 100 index points, increasing to 107.85 index

points or 7.85% in 2020. Furthermore, in 2021, productivity increased to
110.95 index points or 2.87%. However, in 2022, productivity slightly
decreased to 109.02 index points. During the period 2019-2022,
productivity increased by 2.91% due to a significant decrease in the labor
force.

According to the information in the investigation request, the

unforeseeable increase in the importation of cotton yarn from Vietnam
was due to substantial investments and expansions in the Vietnamese
yarn industry since 2019.

Additional investments in Vietnam led to the installation of 250,000 more

yarn spindles in 2021 compared to 2020, with a capacity of 2,600,000
tons. This capacity further increased in 2022 with an additional 100,000
yarn spindles compared to 2021, reaching a capacity of 2,700,000 tons.

Related parties can review detailed information about the investigation in

the initiation notice. Relevant parties with rights and interests can register
as interested parties by submitting written proposals before November 11,
2023, which is 15 days from the issuance of the initiation notice.

All submissions/requests from Vietnamese stakeholders must be sent

both in writing and electronically, clearly stating the name, address, email,
phone number, and fax number of the concerned party to the KPPI.

To safeguard their interests, Vietnamese businesses involved in the

investigation are advised to contact a reputable legal firm specializing in
anti-dumping and trade defense in Vietnam and internationally to receive
timely assistance.

The initiation notice can be downloaded here.

Source: mondaq.com– Nov 07, 2023

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Study says Bangladesh may see decline in apparel export

orders; increased sourcing from China likely

The apparel export from Bangladesh is expected to experience a decline in

orders, while China’s sourcing is poised for a resurgence. This shift is
attributed to a notable reduction in the demand for textile inspections and
audits from international buyers in Bangladesh during the period from
January to September 2023, which contrasted with a significant increase
in China, as reported by Quality Inspection Management.

QIMA, a prominent provider of supply chain compliance solutions, shared

insights in their Q4 2023 report titled Is China Sourcing Regaining
Prominence as Western Consumer Demand Slows Down?

The report highlighted a 10 per cent year-on-year decline in inspection

and audit demand from global buyers during the first nine months of
2023. In the same timeframe, there was a substantial 14 per cent year-on-
year growth in the demand for textile inspections and audits in China,
particularly among western buyers, which saw a 17 per cent increase.

Meanwhile, Faruque Hassan, the President of the Bangladesh Garment

Manufacturers and Exporters Association (BGMEA), reportedly
expressed that the apparel manufacturers in Bangladesh have been facing
challenges for several months due to a global economic slowdown.

The Recent political and labour unrest in the country has further
exacerbated the situation, leading to a decline in work orders even if the
sluggish global demand for apparel, driven by high inflation, has also
contributed to this situation.

Source: apparelresources.com– Nov 07, 2023

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NATIONAL NEWS
India taking up EU carbon tax issue with WTO,
onboarding other countries for support: Goyal

India is concerned by the upcoming carbon tax imposition of the

European Union (EU) – the Carbon Border Adjustment Mechanism
(CBAM) – and is taking it up at the WTO and also bilaterally, so that
exporters and producers get a fair deal, Union Commerce Minister Piyush
Goyal said on Tuesday. According to him, India would also insist on the
implementation of Common But Differentiated Responsibilities (CBDR)
and finance support as determined under the Paris Agreement.

“We are taking it (CBAM) up with the EU and at the WTO very, very
seriously,” Goyal said during his speech at the fourth edition of the Indian
Steel Association’s annual conclave here. “India will not be accepting any
unfair levies and taxes,” he said adding that India is “work(ing) and
fight(ing) for a fair deal”.

The CBAM or carbon tax (a kind of import duty) will come into effect from
January 1, 2026. But in the transition phase, which came into effect from
October 1 this year, domestic companies across seven identified carbon-
intensive sectors - like steel, cement, fertiliser, aluminium, and
hydrocarbon products - have to share data regarding emissions
(embedded) in the products exported to the EU.

“I will assure you that we are extremely concerned about CBAM..... We

shall try to work and fight to get a fair deal for the Indian producers and
exporters and nobody is complacent about CBAM,” Goyal said.

On-boarding other countries

According to the minister, apart from India, other countries have also
taken a stand on this proposed carbon tax. India is also in discussions with
other countries to “onboard” them on the issue and also address this “very
serious concern”.

China and Japan have been among the Asian countries, apart from India,
which reportedly have been quite vocal against CBAM. “We are not scared
of anything that the other countries have to throw at us. Collectively the
world will have to take a view on this (CBAM) and we shall be focussing

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our energies to get other countries on board to address this very serious
concern,” Goyal said.

Trade sources say, that while countries like China, South Korea, and even
Australia have established emission trading schemes (to price carbon)
most of the exporters across these countries lack broad awareness about
EU rules, and there isn’t an established uniform emission accounting and
reporting practice. Recently, Japan’s carbon pricing scheme kicked off on
the Tokyo Stock Exchange.

They say CBAM is being viewed as a trade barrier across industry; while
the EU is pitching it as an environmental measure. “We will always find
innovative solutions. But I can assure you that India will not be accepting
unfair taxes or levies being put on its steel or aluminium industry or on
any industry,” Goyal said.

CBDR and finance

According to Goyal, the EU would have to allow “common but

differentiated responsibility” (CBDR) to India on the issue as New Delhi is
a developing economy. “We are conscious of they have to allow CBDR or
provide funding or technical support that was committed at Paris before
the Paris Agreement took shape...Which is yet to happen in spite of
developed countries wanting in this direction. And we shall be taking up
this issue,” he reiterated to the industry. India’s 26.6 per cent of exports
of iron ore pellets, iron, steel, and aluminium products go to the EU. These
products would be hit by CBAM. India exported these goods worth ₹7.4
billion in 2023 to the EU.

Review of FTAs

Goyal said work is on to provide better access to the steel industry in

different countries through free trade agreements (FTAs). In order to
protect domestic steel players, India is including provisions like “high
value-added norms” and “melt and pour” in these agreements. “We are
looking at both the options so that our steel industry gets
protected....These provisions would deter countries from misuse of FTAs
(too),” he said.

Source: thehindubusinessline.com– Nov 07, 2023

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UK PM Rishi Sunak likely to visit India as and when FTA is

ready to be announced

Notwithstanding the phone call between PM Narendra Modi and his

British counterpart Rishi Sunak last Friday, the much talked about visit by
the UK PM to India is not on the cards until the Free Trade Agreement is
finalised and ready to be signed.

Sunak has also been kept busy by developments in West Asia and there
are speculations that a trip in the middle of a conflict may not be feasible,
ET has learnt. There are reports that the deal could be sealed in December
after the state assembly elections. The two sides have differences whether
taxation will be included in a proposed investment protection pact, as well
as the UK’s demand that tariffs be cut on electric vehicle exports to India.

Launched on January 13, 2022, the India-U.K. FTA began its latest 13th
round of negotiations on September 18. The two sides were earlier looking
to conclude FTA negotiations in October for a visit by Sunak in October
last week ahead of Diwali. But final deal is yet to be

India-UK bilateral trade has increased from $17.5 billion in 2021-22 to

$20.36 billion in 2022-23. With the talks reaching a critical juncture, both
sides are now discussing contentious issues like tariffs on alcohol, Scotch
whisky, rules of origin and visas for professionals.

Sunak spoke to Prime Minister Narendra Modi last Friday afternoon

during which both leaders discussed the need to "de-escalate" tensions
and the importance of protecting innocent civilians in the Israel-Gaza
conflict. The phone call centred around the situation in the Middle East
but also covered bilateral ties and the progress being made towards an
"ambitious" deal in the ongoing India-UK free trade agreement FTA
negotiations.

The leaders discussed recent progress on free trade agreement

negotiations. They agreed on the importance of securing an ambitious deal
that benefitted both sides, according to a UK government readout. Sunak
would likely showcase the deal as a benefit of Brexit.

Source: economictimes.com– Nov 07, 2023

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Walmart on track to meet $10b annual exports from India

by 2027, says sourcing head Andrea Albright

Walmart is on track to reach its target of sourcing $10-billion worth of

goods from India each year by 2027, a senior executive said.

“We don't disclose individual numbers on progress, but we feel confident

about the goals that we have set forth,” Andrea Albright, executive vice
president, sourcing, at Walmart, told ET.

India is already one of the top sourcing markets for the world’s largest
retailer with annual exports worth about $3 billion, according to the
company.

Hundreds of Indian sellers have joined Walmart Marketplace since it

opened this year and many of them have seen double-digit growth, the
company said.

Major differentiators for India include the size of the workforce, the range
of category coverage, and the price point being “very competitive”,
Albright said. “Everything from food to antibiotics, drug manufacturing,
toys, apparel and home…it is such a breadth of categories and that’s quite
unique to have in one country,” she said.

Walmart had in December 2020 said it would triple its exports of goods
from India to $10 billion a year by 2027.

With a goal of accelerating progress towards this commitment, the US

company will soon start the application process for its first growth summit
in India, offering export-ready suppliers, micro, small, and medium
enterprises (MSMEs), cross-border trade suppliers, and innovative supply
chain companies an opportunity to pitch for business.

The summit will bring together dozens of Walmart buyers from the United
States and Indian companies to evaluate their products for export, with
buyers offering real-time, on-the-ground deals and prospects.

The summit is scheduled for February 14-15, 2024 in Delhi.

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Walmart aims to increase exports across categories where India has

expertise, including food, consumables, health and wellness, general
merchandise, apparel, shoes, home textiles, and toys.

India-made apparel, homeware, jewellery, hardlines and other popular

products reach customers in 14 markets, including the US, Canada,
Mexico, Central America and the United Kingdom via Walmart’s Global
Sourcing office in Bengaluru, which opened in 2002.

Source: economictimes.com – Nov 08, 2023

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SEZs should be allowed to sell goods in domestic market

on payment of duty foregone on inputs: GTRI

The government should consider allowing the sale of products

manufactured in Special Economic Zones (SEZs) in the domestic market
on payment of duty foregone on inputs as that would help promote value
addition, think tank GTRI said on Tuesday. At present, units in SEZs are
allowed to sell their products in the Domestic Tariff Area (DTA or
domestic market) on payment of duties on an output basis (finished
goods).

The Global Trade Research Initiative (GTRI) said the government already
allows DTA sales on payment of duty foregone on input basis to firms
operating under the 'Manufacturing and Other Operations in Warehouse
Regulations (MOOWR)' scheme.

The government can "extend the same concession to the SEZs for parity
sake. This will encourage value addition within the SEZ, as in most cases,
the tariff on finished products is higher than on inputs," GTRI Co-Founder
Ajay Srivastava said.

He added that SEZ units could be incentivised to increase value addition

to avail the benefit of DTA sales, which could further enhance
technological advancement and skill development.
These zones are treated as foreign territories for trade and duties, with
restrictions on duty-free domestic sales.

Companies operating within SEZs are allowed to import materials and

components duty-free, with the condition that the finished goods
produced are meant to be exported out of India and sold in the Indian
domestic market on payment of applicable duties on the output.

On demand of units in SEZs that they should be permitted to sell their

products in the domestic market without paying import duties, the GTRI
said and added that this would distort the export focus as well as lead to a
loss of revenue for the government.

"SEZ units are intended to be export-oriented. If goods from SEZs are

allowed into the DTA on the same terms as free trade agreement imports,
this might disincentivise exports and turn these zones into back doors for

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importing goods duty-free for the domestic market, defeating the purpose
of having export-focused zones," it said.

Such a move would also adversely affect the domestic industry by the
influx of SEZ-made goods sold at lower prices due to duty exemption.

"This could lead to unfair competition and potential job losses in domestic
manufacturing sectors," Srivastava said.

According to him, the government will lose customs revenue if SEZ-

produced goods are sold in the domestic market without import duties.

Unlike FTA imports, which are expected to be balanced by reciprocal

benefits from partner countries, allowing duty-free DTA sales from SEZs
does not offer such a balance, he added.

SEZs have emerged as an important contributor to India's exports. Total

exports from these zones stood at USD 155.8 billion in 2022-23. These
included USD 61.6 billion of merchandise and USD 94.2 billion of service
exports.

Source: economictimes.com – Nov 07, 2023

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Indian cotton production to be 6% lower this year

Cotton production during 2023-2024 cotton season is expected to be 6%

lesser than the season that ended on September 30. The Committee on
Cotton Production and Consumption, which met on November 6,
estimated cotton production in the current season (October 2023 to
September 2024) to be 316.57 lakh bales (170 kg each) as against 336.60
lakh bales in 2022-2023.

The total consumption by textile mills is expected to be 294 lakh bales

compared with 295 lakh bales last season. Exports are likely to be 25 lakh
bales and imports 12 lakh bales. The committee projects production to be
lower in the central (Gujarat, Maharashtra, and Madhya Pradesh) and
southern zones (Telangana, Andhra Pradesh, Karnataka and Tamil Nadu).

Cotton production is affected by pink bollworm and inadequate monsoon

in many parts, said Atul Ganatra, president of the Cotton Association of
India. According to Nishant Asher, secretary of Indian Cotton Federation
(ICF), the main issue this year will be demand and not supply.

The daily arrivals to the market at present is 70,000 to one lakh bales.
Currently, Indian cotton prices are on a par with the international prices.
If the international prices decline, Indian cotton will become expensive.
This will hit the domestic textile industry further, he said. The
International Cotton Advisory Committee said in a press release on
November 1 that global cotton production in 2023-2024 is expected to be
higher 3% (25.42 million tonnes) and consumption lower by 0.43 % (23.35
million tones), thus resulting in global stocks seeing 10% jump.

“Cotton prices will remain low because global demand for textiles and
clothing is very low,” said J. Thulasidharan, president of the ICF. The price
of Shankar-6 variety of cotton on Monday, November 7, was ₹56,500 per
candy.

Cotton Corporation of India Chairman and Managing Director Lalit

Kumar Gupta said its officials were present at all procurement centres and
will ensure that farmers get the minimum support price. “Price is subject
to many factors, including domestic and international inventory,” he said.

Source: thehindu.com– Nov 07, 2023

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Open-end spinning mills halt production

Coimbatore: Open-end spinning mills across the state stopped yarn

production on Tuesday, demanding the central and state governments to
reduce raw material prices and power tariff.

The production strike would leave around 2 lakh workers jobless till the
end of this month while resulting in a production loss of 60 crore every
day for the mills.

The mills said they would not resume production till November 30.

There are 600 open end spinning mills operating in the state and they are
into the production of household textiles such as towels, floormats and
bedsheets.

The mills wanted the centre to prohibit waste cotton export, their primary
raw material, and the state to reduce electricity tariff.

The mills said waste cotton price has spiked to 117/kg from 97 a few
months back. While cotton export is allowed despite demand in the
domestic market, a 11% tax levied on import of waste cotton, the mills said.
As far as the state government is concerned, the mills wanted the peak
hours power charges to be scrapped. They also urged the state government
not to levy ‘Fixed Demand Charges’ when the plant is not in use.

The open-end spinning mills have been going through a tough phase for
more than a year. President of Open-End Spinning Mills Association
(OSMA) G Arulmozhi said several mills were neither able to pay back the
obtained loans nor proceed with the production due to mounting financial
stress.

Despite multiple appeals to the Union minister of textiles, Piyush Goyal,

and former state electricity minister V Senthil Balaji and the present
minister S Muthusamy, the issue has witnessed no progress. Instead, the
situation has only worsened, the mill owners said.

AIADMK general secretary Edappadi K Palaniswami on Tuesday

expressed anguish over the strike by the spinning mills for 20 days during
the festive season.

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“I urge the DMK government to withdraw the huge increase in electricity

tariff. The representatives of spinning mills associations should be called
for a meeting and end the strike,” the former chief minister said, stressing
the need for a new textile policy with the support of weavers and spinning
mill representatives to see the state continue to lead in the textile industry.
AMMK chief TTV Dhinakaran urged the state government to accede to the
demand of micro, small and medium enterprises across Tamil Nadu and
withdraw power tariff hike immediately.

“The industrial bodies are anguished over the power tariff revision that
would paralyze the MSMEs, which are already facing a lot of hardships
after Covid-19, such as economic slowdown, rise in the price of raw
materials and shortage of workers,” Dhinakaran said in a statement.

Source: timesofindia.com– Nov 08, 2023

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