APPAREL

INDUSTRY
Presented by:
Amitesh Pandey – F06
Anisha Walia– F07
Jasmine Malhotra – F31
Ruchi Rachna – F57

GROUP- 3
SECTION- F
 OVERVIEW – Global Perspective
 Global garment exports are valued at more than US$310 billion a year, of which the
world's top 15 clothing exporters account for more than 80%.

 Developing countries in Asia continue expanding their Garment Industry due to their
very-low-cost production.

 India is the second most preferred country after China for textile and apparel sourcing. Its
Apparel industry is likely to achieve an export target of US$ 25 billion by 2010-11.
Factors effecting like vast sources of raw materials, low labor costs, entrepreneurship
and design skills of Indian traders, changes in the policies to open up Indian economy to
the outside world etc.

 Recent data released by Apparel Export Promotion Council (AEPC) showed that apparel
exports plunged 11.29% in November 2008 to $621 million dollars, compared to $700
million during the same period in 2007.

 Bangladesh has emerged as a key player in RMG sector (Ready Made Garment
Industry).
 OVERVIEW- Indian Perspective
 14% of total industrial Production and 30% of total exports (in India)
 Current share in world clothing export – 3.5-4 %
 One of the largest foreign exchange earners.
 2nd largest exporter and producer of Apparel Products.
 30,000 manufacturing units and 35 million employed.
 Industry is dominated by sub-contractors and consists mainly of small
units.
 55% of investment in technology done for spinning.
 Supply base is medium quality with small volume.
 During 2008, exports of apparel and textile products to US declined by
0.43% in value terms though export volumes increased by 7.49% due
value increase in Rupee
 PRODUCTS
Major Products:

 Garments and Clothing

 Home Decor and Furnishings:

The majority of home textiles are
produced in Asia. Lower prices
and high volume products have
contributed to the expansion of
exports particularly from China
and India.
 PRODUCTS
 Handlooms : 30 lakh Weavers, 23% of total cloth
produced, promoted through input support, publicity,
market support, up gradation of technology, welfare
measures.
 Textiles, Fabrics and Yarns: 8% of GDP, 30% of
export earnings, 2nd highest mill area after china, facing
competition on quality and value addition factors.
 Leather- Clothing and other Products:
Comprises of jackets, footwear, etc. with 7% share in
exports, major centers include Chennai, Kanpur, Agra,
Jalandhar & Delhi employing 15 lakh people. 50%
consumption within India. Top importers: Germany,
USA and UK.
 Apparel Accessories- Industry and Products: One
of the major manufacturer of accessories with low
price and quality products
APPAREL INDUSTRY : SUPPLY CHAIN
Converted to
Powerlooms/
Handlooms

Distribution
Channels
 Competitiveness
 Caters basic requirement of people.
 Large skilled/ unskilled workforce with
cheap rate.
 Sound Export Potential
 Comprises of effective Supply
Chain( Diverse Fabrics to large market)
 Heavy Production Capacity
 India has a large fiber base
 Have a large and organized mill area
 Economic Upgraded Technology
 Production Centers
 LUDHIANA
 TIRUPUR
 NEW DELHI
 BANGALORE
 MUMBAI
 CHENNAI
 JAIPUR
 Domestic Industry
 Domestic market has grown from US$ 23 billion to
US$ 30 billion, exports has increased from around
US$ 14 billion to US$ 19 billion (04-06 to 06-07  )
 Current share in world export 3.5-4%
 Men’s Apparel 46%, Women – 17%, Kids – 37%
 50% of prod. need to be exported.
 2,000 manufacturer-exporters export apparel, while
the roughly 26,000 merchant-exporters serve as
export brokers.
 India has more than 6,000 knitting units registered as
producers or exporters; the majority are SSI units
 Trends in Export
 Exports of Apparel rise up by 18.21% & Export Share grown up by 29.2%
comparing to last year.
 Major export market – Europe (22% share in textiles & 43% share in apparel).
 Single largest buyer – US ( 10% share in textiles and 32.65 share in apparel).
 Largest export segment – Readymade Garments (45% share in textile exports
and 8.25 share in India's total exports)
 Exports increased from US$ 14 million (2004-05) to US$ 18 million (2007-08)
 With continuing growth, the total exports has increased to – US$ 19.62 billion
(2006-07).
 During the period April-Jan 2007, exports of apparel to US declined by 0.43% in
value terms though export volumes increased by 7.49% as compared to last
year. 
 India exports products to more than 200 countries
 US leads the row of imports from India with 28.33% of total, followed by
Germany, UK, Japan.
 Indian Apparel Industry facing competition within Asian countries.
 Decline in exports to US, France, Italy as compared to last year.(HS 62)
EXPECTED
 The demand for ready-made garments in rural India will surge
at an annual rate of 16.50% to reach Rs. 42,918 Crore or
US$10.41 billion by 2010.

 The organized apparel retailing in India is projected to surge at

an annual averaged growth rate of 30% from 2008 to reach Rs.
52,289 Crore in 2010.

 Industry is aiming an export turnover of $50 billion by 2010,

amounting to more than US$ 100 billion including that for
domestic consumption
Source: Compiled from Apparel Export Promotion Council (AEPCINDIA.COM)
 Exports From India
In Million US $

Products 2005-06 2006-07 2007-08

RMG 8078.05 8948.44 9218.84

Knit Apparel 3016.84 3524.50 3997.72

Woven Apparel 5061.21 5423.94 5221.12

Source: Compiled from Apparel Export Promotion Council (AEPCINDIA.COM)

 Major Exporters in India
 Madura Garments (Indian Rayan)
 Arvind Mills Ltd
 Raymonds Ltd.
 Alok Industries Ltd.
 Welspun India Ltd.
 Bombay Dyeing
 JNS Fabrics & Exports.
 Primex Apparel Sourcing Services
 The Outlook Sourcing Services
 Pratibha Syntex Pvt. Ltd
 Provogue India Ltd.
 Wills Lifestyle
 Gokaldas Exports Ltd.
 COMPETITIORS (Top 10)

China
Vietnam
Bangladesh
Indonesia
Mexico
Hong Kong
Dominican Republic
Korea
Thailand
Philippines
Leading exporters and importers of clothing, 2007
(Billion dollars and percentage)

Value Share in world exports/imports Annual percentage change

2007 1980 1990 2000 2007 2000-07 2005 2006 2007

Exporters
China a 115.2 4.0 8.9 18.2 33.4 18 20 29 21
European Union (27) 103.4 - - 28.4 29.9 9 3 7 13
extra-EU (27) exports 24.8 - - 6.5 7.2 10 5 10 19
Hong Kong, China 28.8 12.3 14.2 12.2 8.3 2 9 4 1
domestic exports 5.0 11.5 8.6 5.0 1.4 -9 -11 -7 -26
re-exports 23.8 0.8 5.7 7.2 6.9 8 18 8 10
Turkey b 14.0 0.3 3.1 3.3 4.1 12 6 2 16
Bangladesh b 10.1 0.0 0.6 2.6 2.9 10 19 28 4
India 9.7 1.7 2.3 3.0 2.8 7 26 10 2
Viet Nam b 7.2 ... ... 0.9 2.1 22 10 19 29
Indonesia 5.9 0.2 1.5 2.4 1.7 3 16 16 2
Mexico a 5.1 0.0 0.5 4.4 1.5 -7 -2 -13 -19
United States 4.3 3.1 2.4 4.4 1.2 -9 -1 -2 -12
Thailand 4.1 0.7 2.6 1.9 1.2 1 3 4 -4
Pakistan 3.8 0.3 0.9 1.1 1.1 9 19 8 -3
Morocco a 3.6 0.3 0.7 1.2 1.0 6 -6 14 11
Tunisia 3.6 0.8 1.0 1.1 1.0 7 -5 -3 18
Sri Lanka b 3.3 0.3 0.6 1.4 1.0 2 4 6 8
Above 15 298.1 - - 79.2 86.3 - - - -

Sources: INTERNATIONAL TRADE STATISTICS 2008, WORLD TRADE ORGANIZATION

 Quality Standards
 For textile and apparel industry product quality is calculated in terms of quality and
standard of fibers, yarns, fabric construction, color fastness, surface designs and the
final finished garment products. However quality expectations for export are related
to the type of customer segments and the retail outlets.

 Only limited use of various chemicals like azo dyes, heavy metals, odour, etc
should be permitted to prevent ecological requirements.

 Apparel Industry have ISO Certification

 Operation incurs heavy expenditure to the manufacturers. ISO standards are

implemented to lower its operating costs and improve the quality of its output,
ultimately increasing the level of customer satisfaction.

 ISO standards enable the industry to enhance the quality of raw material input,
thereby strengthening the quality of the ultimate/final product, which leads to
performance improvement, factual approach towards the decision making process,
and a mutually benefiting suppliers relationship.
 Quality Standards (cont…)
 Right from yarn purchase to shipment every activity is governed by
documented standard operating procedures and instructions, which
complies with the requirements of ISO 9001.

 Each process is carried out with the PDCA process approach (i.e. Plan-Do-
Check-Act), which gives better results in achieving better quality and on
time shipments.

 Inspection and testing at each stage of manufacture assures quality

requirements are met.

 Internal audit and external audit performed periodically ensures effective

implementation of Quality Management System

 Periodical feedback from customers reveals their level of satisfaction

 Standards are specified on selection of Cotton Yarn,

 Foreign Trade Policy
 Clothing and accessories are classified under HS code 61 and 62. All the
products listed under these codes are freely importable. Further more the
manufacturers of these products are exempt from obtaining a license to
manufacture though they are required to file an Industrial Entrepreneur
Memoranda (IEM) in Part 'A' with the Secretariat of Industrial Assistance
(SIA), and obtain an acknowledgement and part B after the commencement of
commercial production. Certain items of clothing are reserved for small scale
industries.

 Most of the articles falling under HS 61-62 carry an import duty of 56.83 per
cent which includes 30 per cent basic duty, 16 per cent additional duty and 4
per cent special additional duty. India has reduced peak rate of customs duty to
20%, in view of the WTO Agreement.

 In the foreign trade policy, certain amendments and inclusions have been done
pertaining to specific sectors of textiles and garments specially the handlooms.
 FOREIGN TRADE POLICY:
TEXTILE & APPAREL INDUSTRY
 Handlooms
 Specific funds would be earmarked under MAI/ MDA Scheme for promoting handloom
exports.
 Duty free import entitlement of specified trimmings and embellishments shall be 5% of FOB
value of exports during the previous financial year.
 Duty free import entitlement of hand knotted carpet samples shall be 1% of FOB value of
exports during the previous financial year.
 Duty free import of old pieces of hand knotted carpets on consignment basis for re-export
after repair shall be permitted.
 New towns of export excellence with a threshold limit of Rs 250 crore shall be notified.

 The textile and apparel industry is an important one to India, contributing

1.6% of industrial production and 30 % of total exports.
 Import duties on capital equipment are low (the majority of the capital equipment used by
the apparel industry, like sewing machines, can be imported at 5% basic customs duty).
 Fabrics can be imported duty-free if made up into garments and re-exported
 Import duties on fabrics and other raw materials are duty free for export production.
 The apparel industry can import duty free specified trimmings and embellishments like
Fasteners, Rivets, Garment Stay, textile, Badges, Sewing Thread, Sequin, Tape & others for
export production.
 Government Policies Affecting the
Industry
 Removal of ready-made apparel articles from the list of
products reserved for the SSI sector make foreign firms to
invest up to 100 percent in the apparels
 GOI implemented the Technology Up gradation Fund (TUF)
to spur investment in new textile and apparel technologies
 To boost exports and encourage new industry investment, the
GOI under the quota entitlement policy increased the share of
quotas
 The GOI grants automatic approval within 2 weeks of all
proposals involving foreign equity up to 51 percent in the
manufacture of textile products in the composite mills and in
the manufacture of waterproof apparel products.
 The GOI created a $16 million “cotton technology mission”
to increase research on improving cotton productivity and
quality.
 Government Policies Affecting the Industry
(cont…)
 EOUs and composite mills that produce yarn for captive consumption are
exempt from the GOI’s hank yarn obligation of , to produce 50 percent of
its yarn for the domestic market in hank form for use in the handloom
sector.
 The GOI plans to reduce the hank yarn obligation from50 percent to 30
percent for all other spinning units.
 To promote modernization of Indian industry, set up of EPCG scheme,
which permits a firm importing new or secondhand capital goods for
production of articles for export to enter the capital goods at preferential
tariffs.
 Government has decided to sanction additional funds required by textile
industry, as the allocated amount in the year’s Budget is insufficient.
 Amount of Rs 1000 crores set aside for Technology Up gradation Fund
Scheme (TUFs).
 Challenges to Indian Apparel Sector
 Policies of the Government of India favoring small firms
 Small units use low levels of technology and produce mostly low
value-added goods of low quality that are less competitive globally
 India’s Apparel industry depends heavily on domestically produced
cotton
 Small Unit sector had restricted the entry of large-scale units and
discouraged investment in new apparel manufacturing technologies
 India have high energy and capital costs, raw material costs,
multiple taxation etc.
 Appreciation of Rupee
 Low Institutional Support
 APPAREL EXPORT PROMOTION COUNCIL
(AEPCINDIA.COM)
 Incorporated in 1978, AEPC is the official body of apparel exporters in India that
provides invaluable assistance to Indian exporters as well as importers/international
buyers who choose India as their preferred sourcing destination for garments.

 Apparel Export Promotion Council (AEPC) has been the moving force behind lot
of achievements:

 From one office in 1978, it has over 40 offices in just a span of 30 years.

 From just being a quota monitoring entity, AEPC is today a powerful body for
the promotion and facilitation of garment manufacturing and their exports.

 For Indian exporters, AEPC is quite literally a one-stop shop for information,
advise, technical guidance, workforce and market intelligence. Members have
access to updated trade statistics, potential markets, information on international
fairs and assistance in participating at these fairs. It also plays a large role in
identifying new markets and leading trade delegations to various countries.
 APPAREL EXPORT PROMOTION COUNCIL
OF INDIA
 In recent years, AEPC has worked tirelessly in integrating the entire industry –
starting at the grass root level of training the workforce and supplying a steady
stream of manpower to the industry; identifying the best countries to source
machinery and other infrastructure and brokering several path breaking deals
for its members and finally helping exporters to showcase their best at home
fairs as well as be highly visible at international fairs the world over.

 Twice a year, AEPC showcases the best of India's garment export capabilities
through the prestigious India International Garment Fair, playing host to over
350 exhibitors displaying the exotic, the haute, the prêt, the contemporary and
much more.

 With AEPC's expertise and all the advantages that India has, it makes for a
truly win-win situation – Indian exporters grow stronger each year in their
achievements, skills and proficiency, while international buyers get superior
solutions for their garment imports.
 PROMOTION
AEPC:
 Introduced project of a world class Trade Mart cum Exhibition Complex in
Delhi.
 Constructing Apparel House in Gurgaon having 229 manufacturers under
one roof, the only one of its kind in South Asia.
 A one stop sourcing point for all types of apparel, fabrics, accessories and
other textile products, which are a mark of quality and style.
 The buyer can explore a perfect blend of fashion, designs, quality, patterns,
textures, colors, etc.
 Features like Showcase of the latest and the trendiest collection of
garments at one single platform, world class hub for b2b trade, networking
with leading Indian and global sourcing agents, manufacturers and
suppliers by organizing activities like exhibitions, conferences, fashion
shows, etc.
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THANK
YOU