GROWTH PROSPECTS OF THURST

AREAS OF INDIAN EXPORT

APPARELS

SUBMITTED TO: SUBMITTED BY:

Ms Alka Maurya Prerna Sharma -470
Shalini Yadav- 621
Ena Sindwani-230
OVERVIEW

India is today recognized as one of the best sourcing destinations for

garments, textiles, accessories and finish: it provides a perfect blend of
fashion, designs, quality, patterns, textures, colors and finish.
Manufacturers here are ready to innovate, be flexible on quantities, have
a hands-on approach to quality control and keep the integrity on
deadlines.

Labor is skilled and economical while prices are highly competitive

without taking away from the quality of the final product. Amazing
technological developments, superior design capabilities and companies
that provide integrated logistic solutions are other highly prized support
systems that the industry thrives on.

Combined with these man-made assets are the country's natural assets
which play a large role in boosting the garment industry – by providing
raw materials of world-class quality. Here are some of India's natural
leverages that the industry uses to its full advantage: India the largest
producer of jute, the second largest producer of cotton, silk and cellulosic
fibre, the third largest producer of raw cotton and the fourth largest
producer of synthetic fibre.

Certainly there is more – above all, a friendly Government policy

towards exports and excellent cultural and political connections with the
importing countries has nurtured this industry and made it bigger and
better each year.

DESCRIPTION OF THE CLUSTER:

The readymade garments manufactured in Indore are well received in the
overseas market. The products are exported through various marketing
Channels to U.K., France, Other EU Countries, and Middle East etc. Indore
city has been a large center of textile mills and thus Readymade Garments
industry is an offshoot of these textile mills. The industry also owes its debut
to the readymade garment industry in the nearby cities of Mumbai &
Ahmedabad.. The readymade garment industry in this era created new
designs adding value to the products with gold and silver embroidery and
other artwork with proper fittings.
DEFINING THE PRODUCT:
In India, the Readymade Garment industry is located in Delhi, Mumbai,
Kolkata, Indore, Bangalore, Jaipur, Tirupur, Ludhiana, Cochin &
Hyderabad. The product manufactured in Indore is mainly kidswear, though
they’re many units manufacturing shirts & trousers for men’s wear and
ladies wear. Lately many new units, which have come up in the last decade
are manufacturing jeans, which is now the popular apparel among the
growing young population. Large MNCs or large domestic players have not
entered the kids wear market and ladies wear market as “brands” have not
made any headway in this sector. The readymade garment units of Indore
has no dearth of orders, as it caters to the non branded kids wear, ladies wear
& gents wear market.

BROAD PRODUCT GROUPING:

The Readymade Garments industry in Madhya Pradesh is mainly
concentrated in Indore, which is well known for its fashion garments.

Product range
There is wide range of products in Knitted and Woven Fabrics ranging:
 Men : Casual shirts, shorts, trousers etc
 Ladies : Blouses, Skirts, Tops, Dresses.
 Children : Readymade Garments, Rompers, Jumpers,
Bibs.
 Undergarments : Panties, Underwear
 Sleepwear : Night Shirts, Pyjamas, Robes etc

APPAREL EXPORT PROMOTION COUNCIL (AEPC)

The Apparel Export Promotion Council (AEPC) was sponsored on
February 22, 1978 to promote exports of readymade garments from India.
The Council was administering the exports entitlements quota in respect
of readymade garment items, which were subject to restraint in USA,
European Union and Canada. Besides its headquarter at New Delhi, the
Council has Regional Offices at New Delhi, Jaipur (Rajasthan), Ludhiana
 (Punjab), Mumbai (Maharashtra), Chennai and Tirupur (Tamilnadu),
Bangalore (Karnataka) and Kolkata (West Bengal)
Department of Commerce
Export Import Data Bank
Export :: Commodity-wise 2 digit level

Dated: 23/12/2010
Values in US $ Million

2008- 2009-
S.No. HSCode Commodity %Share %Share %Growth
2009 2010
60. 60 KNITTED OR 99.88 0.0539 122.19 0.0684 22.34
CROCHETED
FABRICS.
61. 61 ARTICLES OF 5,048.10 2.7244 4,591.10 2.5684 -9.05
APPAREL AND
CLOTHING
ACCESSORIES,
KNITTED OR
CORCHETED.
62. 62 ARTICLES OF 5,902.93 3.1857 6,127.80 3.4281 3.81
APPAREL AND
CLOTHING
ACCESSORIES,
NOT KNITTED
OR
CROCHETED.

TRENDS IN APPARELS EXPORTS

Department of Commerce
System on Foreign Trade Performance Analysis (FTPA)
Export of Principal Commodities Groups
Dated: 23/12/2010
Values in US$ Millions

Commodity Apr-Jul 2007 Apr-Jul 2008 %Growth %Share

TEXTILES 5,893.65 7,064.00 19.86 9.37

3,245.87 3,815.02 17.53 5.06

01) Readymade
garments
Department of Commerce
System on Foreign Trade Performance Analysis (FTPA)
Export of Principal Commodities Groups
Dated: 23/12/2010
Values in US$ Millions

Commodity Apr-Jul 2008 Apr-Jul 2009 %Growth %Share

TEXTILES 7,064.00 6,230.45 -11.80 11.81

3,815.02 3,769.97 -1.18 7.15

01) Readymade
garments

Export :: Region-wise all commodities

Department of Commerce
Export Import Data Bank

Dated: 25/12/2010
Values in US$ Million
Sorted on HSCode

Region: Europe
2008- 2009-
S.No. HSCode Commodity %Growth
2009 2010
60. 60 KNITTED OR CROCHETED FABRICS. 9.72 10.27 5.64
ARTICLES OF APPAREL AND CLOTHING
61. 61 2,821.50 2,448.63 -13.22
ACCESSORIES, KNITTED OR CORCHETED.
ARTICLES OF APPAREL AND CLOTHING
62. 62 ACCESSORIES, NOT KNITTED OR 2,792.68 2,937.68 5.19
CROCHETED.

Region: EU Countries (27)

 2008- 2009-
S.No. HSCode Commodity %Growth
2009 2010
60. 60 KNITTED OR CROCHETED FABRICS. 9.49 9.51 0.13
ARTICLES OF APPAREL AND CLOTHING
61. 61 2,712.01 2,396.09 -11.65
ACCESSORIES, KNITTED OR CORCHETED.
ARTICLES OF APPAREL AND CLOTHING
62. 62 ACCESSORIES, NOT KNITTED OR 2,711.82 2,850.74 5.12
CROCHETED.

Region: Southern Africa

2008- 2009-
S.No. HSCode Commodity %Growth
2009 2010
60. 60 KNITTED OR CROCHETED FABRICS. 0.24 1.38 485.53
ARTICLES OF APPAREL AND CLOTHING
61. 61 68.27 53.52 -21.60
ACCESSORIES, KNITTED OR CORCHETED.
ARTICLES OF APPAREL AND CLOTHING
62. 62 ACCESSORIES, NOT KNITTED OR 36.15 37.31 3.21
CROCHETED.

Region: Other WE Countries

2008- 2009-
S.No. HSCode Commodity %Growth
2009 2010
59. 60 KNITTED OR CROCHETED FABRICS. 0.23 0.77 232.25
ARTICLES OF APPAREL AND CLOTHING
60. 61 107.41 51.07 -52.45
ACCESSORIES, KNITTED OR CORCHETED.
ARTICLES OF APPAREL AND CLOTHING
61. 62 ACCESSORIES, NOT KNITTED OR 77.80 84.40 8.48
CROCHETED.

Region: East Europe

52. 61 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNITTED 2.09 1.47 -29.77
OR CORCHETED.
53. 62 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, NOT 3.06 2.53 -17.26
KNITTED OR CROCHETED.

Region: Africa
2008- 2009-
S.No. HSCode Commodity %Growth
2009 2010
60. 60 KNITTED OR CROCHETED FABRICS. 0.67 2.18 226.26
ARTICLES OF APPAREL AND CLOTHING
61. 61 90.72 79.36 -12.52
ACCESSORIES, KNITTED OR CORCHETED.
 ARTICLES OF APPAREL AND CLOTHING
62. 62 ACCESSORIES, NOT KNITTED OR 131.43 143.13 8.90
CROCHETED.

Region: West Africa

2008- 2009-
S.No. HSCode Commodity %Growth
2009 2010
59. 60 KNITTED OR CROCHETED FABRICS. 0.06 0.00 -95.50
ARTICLES OF APPAREL AND CLOTHING
60. 61 17.99 18.50 2.85
ACCESSORIES, KNITTED OR CORCHETED.
ARTICLES OF APPAREL AND CLOTHING
61. 62 ACCESSORIES, NOT KNITTED OR 25.64 32.63 27.27
CROCHETED.

Region: Central Africa

2008- 2009-
S.No. HSCode Commodity %Growth
2009 2010
58. 60 KNITTED OR CROCHETED FABRICS. 0.00
ARTICLES OF APPAREL AND CLOTHING
59. 61 0.45 0.63 39.88
ACCESSORIES, KNITTED OR CORCHETED.
ARTICLES OF APPAREL AND CLOTHING
60. 62 ACCESSORIES, NOT KNITTED OR 1.64 1.53 -6.62
CROCHETED.

Region: East Africa

60. 60 KNITTED OR CROCHETED FABRICS. 0.37 0.80 117.46
61. 61 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNITTED 4.01 6.70 66.98
OR CORCHETED.
62. 62 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, NOT 68.00 71.66 5.38
KNITTED OR CROCHETED.

Region: America
60. 60 KNITTED OR CROCHETED FABRICS. 33.77 30.33 -10.17
61. 61 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, 1,451.53 1,364.02 -6.03
KNITTED OR CORCHETED.
62. 62 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, NOT 1,735.72 1,730.33 -0.31
KNITTED OR CROCHETED.
 INDIA’S FOREIGN TRADE POLICY

As per FTP 2009-14:

FPS benefits at 2% on apparel export to USA and EU have been

discontinued for the exports made after 30.9.2009.Export of products, made
after 27.8.2009, would be incentivized at 2 % of FOB value of exports under
FPS when exported to the Linked Markets (countries)

Higher Support for Market and Product Diversification

256 new products added under FPS , which shall be entitled for benefits
@ 2 per cent of FOB value of exports to all markets. Nearly 300
products from the readymade garment sector incentivized under MLFPS
for further 6 months from October, 2010 to march, 2011 for exports to 27
EU countries.
Market focus scheme introduced for the market diversification is
continued. Markets like Brazil, Argentina, Chile and Mexico in Latin
America and South Africa, Nigeria, Tanzania, Algeria, Kenya and
Namibia – are these new or the continued markets –incomplete.

LINKED Markets for Apparel Sector

 . Japan

2. Australia

3. Brazil

4. Algeria

5. Egypt

6. Kenya

7. Mexico
 8. Nigeria

9. South Africa

10. Tanzania

11. Ukraine

12. New Zealand

13. Cambodia

14. Vietnam

Support for Technological up-gradation

Zero duty EPCG scheme, introduced in August 2009 and valid for only
two years up to31.03.2011, has been extended by one more year till
31.03.2012, to give a boost to technological up-gradation.

Additional Towns of Export Excellence (TEEs) announced in which

Bhiwand(Maharashtra) has been named for Textile.

TRADE PROMOTION MEASURE IN EXIM POLICY 09-10

MARKET LINKED FOCUS PRODUCT SCHEME

 Textile and leather exporter will get direct assistance worth 2% of

their value of export to US and European union in the form of duty
free scrips that could be sold for cash. The scrips or certificates which
can be used for importing goods duty free, is transferable and the
scheme will be on for six months beginning april 09.
 Rs. 325 crores would be provided under promotional schemes for
textile for exports made with effect from 1st April 2009.
 Technical textiles have now been added under Focus Product Scheme.
Under DEPB Scheme
DEPB scheme will now be issued without waiting for realization of
export proceeds. The exporters will be required to submit proof of export
proceeds realization with the time limits prescribed by RBI.

◦ This provision shall be applicable on or after 1st April 2009.

◦ DEPB scrips were earlier used for payment of duty only on
imported items that were under free category but now this
utilization is now extended for payment of duty for import of
restricted items as well.
◦ It has also been extended till 31st December 2009.

Under Advance authorization

Export obligation period against advance authorizations has been extended
up to 36 months.
Supply of an intermediate product by the domestic supplier directly from
their factory to the port against advance intermediate authorization has been
allowed.

Schemes Offered

1.TECHNOLOGY UPGRADATION FUNDS SCHEME

2. MDA
3. FOCUS MARKET SCHEME
4.TEXTILE CENTRE INFRASTRUCTURE DEVELOPMENTSCHEME
5.APPAREL PARK
6.SPECIAL ECONOMIC ZONES

The Textile Ministry recently decided to extend the ‘Technology

Upgradation Fund’ (TUF) scheme to “boost the textile industry”. The
industry has begged the extension of the 10% upfront capital subsidy for
specified textile processing machinery by another year.
 The subsidy is additional to the interest subsidy of 5% under the TUF
for specified textile processing machinery and the implementation
period for the scheme is one year. Which will end on April 19,
2006.Under the scheme, the government has yet sanctioned 4,047
applications worth Rs 12,758 crore for expansion projects worth Rs
28,628 crore. The largest number of applications for funding has come
from Gujarat (1,214).Tamilnadu got around 1,174 applications and
Maharashtra 317.

MARKETING DEVELOPMENT ASSISTANCE SCHEME

Export promotion continues to be a major thrust area for the Government. In

view of the prevailing macro economic situation with emphasis on exports
and to facilitate various measures being undertaken to stimulate and
diversify the country’s export trade
Marketing Development Assistance (MDA) Scheme is under operation
through the Department of Commerce to support the under mentioned
activities:
(i) Assist exporters for export promotion activities abroad
(ii) Assist Export Promotion Councils (EPCs) to undertake export
promotion activities for their product(s) and commodities
(iii) Assist approved organizations/trade bodies in undertaking exclusive
nonrecurring innovative activities connected with export promotion efforts
for their members
(iv) Assist Focus export promotion programmes in specific regions abroad
like FOCUS (LAC), Focus (Africa), Focus (CIS) and Focus (ASEAN + 2)
programmes.
(v) Residual essential activities connected with marketing promotion efforts
abroad

Textile Centre Infrastructure Development Scheme

 Government of India has also launched “Textile Centres Infastructure

Development Scheme (TCIDS)”- for modernising infrastructure
facilities at major textile centres of the country. The TCIDS Scheme
came into operation w.e.f. 8.3.2002.
 The scheme by its very nature aims at upgrading infrastructure
facilities of textile centres such as Tirupur, Coimbatore, Karur,
 Bangalore, Delhi-Noida-Gurgaon, Panipat, Ludhiana, Ahmedabad,
Mumbai, Bhiwandi, Ichalkaranjee, Burhanpur, Salem-Erode,
Varanasi-Mau, Meerut-Pilakhua, Surat, Solapur, Calcutta (knitting),
Chennai, Cannannor, Amritsar, Baddi (Himachal Pradesh), Malegaon
and Bhilwara

Apparel Park
 With the objective of imparting a focused thrust to set up apparel units
of international standards and to give a fillip to exports, the
Government had launched the Apparel Park for Exports Scheme
(APES), a centrally sponsored scheme. Twelve Project Proposals have
been sanctioned for setting up Apparel Parks at Tronica City &
Kanpur (U.P.), Surat (Gujarat), Thiruvananthapuram (Kerala),
Visakhapatnam (Andhra Pradesh), Ludhiana (Punjab), Bangalore
(Karnataka), Tirupur & Kanchipuram (Tamil Nadu), SEZ, Indore
(Madhya Pradesh), Mahal (Jaipur, Rajasthan) and Butibori-Nagpur
(Maharashtra). Developments of basi cinfrastructure facilities have
been completed in eight projects, where textiles units have started
commercial production. Assistance of Rs.128.69 Crore has been
provided under the scheme for these projects

 With a view to overcome the shortcomings experienced on account of

the multiplicity of controls and clearances; absence of world-class
infrastructure, and an unstable fiscal regime and with a view to attract
larger foreign investments in India, the Special Economic Zones
(SEZs) Policy was announced in April 2000.

 OPERATIONAL SEZ IN INDIA FOR APPARELS ARE-

 Mahindra City SEZ (Textiles), Tamil Nadu
 Surat Apparel Park , Gujarat
 Gujarat Industrial Development Corporation (Apparel) Ahmedabad,
Gujarat
The quality standards

 The Textile Commission, under the Ministry of

Textiles, facilitates firms in the industry to improve
their quality levels and also get recognised quality
certifications. Out of 250 textile companies that have
been taken up by the Commission, 136 are certified
ISO 9001. The other two certifications that have been
targeted by the Textile Commission are ISO 14000
Environmental Management Standards and SA 8000
Code of Conduct Management Standard.
 The Clothing Manufacturers Association Of India
(CMAI) is the pioneer and most representative
Association of the Indian apparel industry for over
four decades. It has a membership base of over 20,000
companies, including Readymade Garment
Manufacturers, Exporters, Retailers and Ancillary
Industry. With its headquarter in Mumbai, CMAI also
has branches in New Delhi, Bangalore and Pune.
 The Association runs a well equipped Testing
Laboratory to test the Physical and Chemical
characteristics of Yarn, Fabrics and Garments. The
services of the Laboratory are open to Members as
well as Non-Members.
Performance
 As the world’s second largest producer of textile and garments,
India’s garment exports totaled US$ 10.17 billion during the year
2008-09, giving it an enviable market share of 2.99%. The Americas,
EU, much of Asia and Middle East are India’s clients.

The industry proudly supports 7 million people as part of its

workforce, and aims to double this figure by 2011-12; even today it is
the second largest provider of employment in the country. For every
INR 100,000 invested in the industry, an average of 7 additional jobs
created.

The Apparel Sector alone contributes to 8% of India’s total exports

with exports recording a 1% growth over last year. By the year 2011-
12, India expects to record a 15% growth in quantity and 20% growth
in values.

In RMG exports, India, today, ranks 6th in the world, with a 2.6%
world market share and robust 11% growth.

Come to India, for nowhere else in the world do you find a such a
superb amalgam of natural resources, industry expertise,
entrepreneurial initiatives backed by friendly Government and a
smart, winning attitude that spurs the Apparel Industry to soar above
the rest of the world in its achievements!!

INDUSTRY CHALLENGES
 The Apparel Industry is growing at a very high rate but still there are
some barriers, which are hindering the growth of this industry. Some
of them are:
 Though the demand for garments is increasing day by day but the
production rate has still not been able to match with the ever rising
demand. More production facilities are needed to meet the demand.
  Most of the raw material needed for apparel manufacturing is
available in the developing or under developed countries and these
countries do not have enough resources and manpower to explore
them. These countries also do not have finance to set up factories for
clothing and garment production.
 Globalization has helped the trade in many ways but due to
globalization the competition has increased and so it is not very easy
for the firms to cope up with so much competition, as they have to
meet the deadlines and also maintain quality.
 The importers of developed economies are facing very stiff
competition as countries like China are producing good quality
products in low prices due to availability of very cheap labour.
 Some trade laws still are very much in favor of developed countries
and they need to be reviewed, to facilitate imports from the
developing countries.
 As apparel industry is fashion driven, and fashion keeps changing, the
firms have to cope with the changing apparel industry trends and still
complete orders in time. Thus they usually have to work under
pressure.

RELEVANT NEW ARTICLES

AEPC chairman meets finance minister on drawback rates

Mr Premal Udani, chairman of the Apparel Export Promotion Council

(AEPC), met finance minister Pranab Mukherjee on the issue of duty
drawback and high cotton / cotton yarn prices.

Mr Udani apprised Mr Mukherjee about the concern of garment export

industry due to reduction of all industry duty drawback rates for 2010-11.
The AEPC chairman submitted a letter and a presentation requesting the
finance minister to restore the duty drawback rates and subsequently
enhance them.
Mr Mukherjee gave a patient hearing to the request of Mr Udani and said
that he will look into the matter. The finance ministry will do its best for the
apparel export industry, he added.
 Mr Udani also apprised Mr Mukherjee about the high input costs
incurred by garment exporters due to a phenomenal rise in prices of
cotton, cotton yarn and cotton fabrics. He requested the intervention
of finance minister for calibrated exports of cotton / cotton yarn.

The AEPC delegation was accompanied by secretary general Vimal

Kirti Singh, senior vice-chairman Praveen Nayyar and executive
committee member Harish Ahuja.

Mr Udani also wrote letters to secretary at the department of revenue

Sunil Mitra, joint secretary for drawbacks Najib Shah, textile minister
Dayanidhi Maran, textile secretary Rita Menon and joint secretary V.
Srinivas, saying the industry is deeply disappointed by 15 per cent
reduction in duty drawback rates

India secures joint strategy with Argentina in textile sector

 India and Argentina have secured a joint strategy in textile industry.

Both the countries agreed on a policy to reinforce its mutual support --
particularly in the field of technology being used.

The secretaries of commerce and industry from both the countries

have been looking for prospective alliances. The main objective is to
reinforce mutual assistance in different fields.

Argentina's secretary of industry and trade Eduardo Bianchi and

India's textile secretary Rita Menon said both the countries want to
form alliances in textile production and trade.

The textile industry in Argentina enhanced its business by 21 per cent

between January and August whereas exports increased by 44.1 per
cent during the same period last year.