Feedback
A pioneer B2B media and publication platform connecting with Fashion Brands & Retail in India

‘India could not seize opportunity when China vacated the space’: HKL Magu

H K L Magu

 

“GST is a great initiative. A single tax has subsumed other taxes,’ says H K L Magu, Chairman, AEPC, praising the government’s efforts and adds, “But there were problems in implementation. Exporters suffered since their funds were blocked and they were unable to pay suppliers on time. Suppliers don’t give advance, since they can’t carry them forward for an indefinite period.”

Exports in September 2017 rose almost 40 per cent because of the special package. “GST Council assured us refunds within seven days. Exporters were told they would get 90 per cent of the refund within seven days. However, for July, August, and September, there were no refunds. Given this scenario, buyers had no choice but to look for other options like Bangladesh, Vietnam and Cambodia,” he explains. Since competitors like Bangladesh and Cambodia already have an FTA with the EU, buyers chose them over India. He points out, “When China vacated the space due to higher cost of production orders were diverted from China to India. But we could not seize the opportunity.”

Dipping exports, a cause of concern

Talking about India’s dipping apparel exports, Magu observes, “Exports started falling in October by 41 per cent. In November, the decline was 14 per cent while December recorded 13 per cent decline and January saw a 14 per cent dip. There has been a month to month decline in apparel productivity.” From a plus 1.3 per cent in April, 2017, May saw a fall of five per cent; June the decline was 3.2 per cent while in July, it was 5.1 per cent. August, September, October, November and December recorded 6.4 per cent, 7.2 per cent, 11 per cent, 13.1 per cent, 13.5 per cent dip respectively. “Overall the dip in production from May to December has been 10.4 per cent. Owing to this, we can’t meet our export target of $20 billion. We will be lucky to do what we did last year. Last year, we clocked in almost $17 billion. However, once refunds start flowing, things will improve. Moreover, free trade agreements will help boost our exports,” he feels.

A challenging scenario

Magu points out clothing will always be in demand much like food and housing. But there are times when main buyers reduce their inventories because once the season ends they have to sell the stock at discounted prices. “Indeed, business is there but buyers want fast track suppliers. Fast fashion dictates trends. Indian exporters don’t have a great infrastructure and most can’t supply in a short span of time. But China has great production abilities and huge capacities. They can cater to any order, however big, within a specified time while we depend on fabric availability.” He emphasizes while India is good in value addition, embroidery, lace work we are not very competitive in basic items. That’s why India’s exports to the world are not growing.

Speaking about the challenges the industry is facing today, Magu says, no company in the country is showing a profit of more than five per cent as interest costs are high. “The interest subvention that they get are not good enough. There is a need for cut in interest rates.” Moreover, ports in India are not very efficient. In Bangladesh and Sri Lanka, the cargo is taken a day before the ship leaves while in India the cargo is taken seven days earlier. A cargo from Delhi to Mumbai takes three days to move. In Germany, one can do 1,200 km in 15 hours. “We have to wait 40 days for fabrics to come from China. So, we can’t meet the 45 days delivery window. That’s the reason factories lie idle from May to September. For five months, there is no business. Indeed, there are markets like South America and South Africa but their imports are not so high. AEPC sends delegations to these markets and business is gradually improving,” he adds.

Textile 4.0 to boost production

He feels, there is still some time for Textile 4.0 to spread out in India but when it does happen the industry will adapt. “We can take up the challenge. Productivity will increase. We can grow only if we have the technology with us. 4.0 will enhance quality standards and we can do fast deliveries and small orders,” he sums up.

LATEST TOP NEWS
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10

HRX to push up sales in women’s wear, spread retail through MBOs, EBOs

HRX to push up sales in women’s wear, spread retail through MBOs, EBOs

The activewear segment in India is estimated at a whopping Rs 8,500 crore and expected to continue growing at CAGR of 12 per cent and touch sales worth around Rs... Read more

Duke's collection' 18 is for work and play

Duke's collection' 18 is for work and play

Inspired by the fashion culture of New Zealand, Duke has established an impressive collection of various styles, colors and sizes in Shirts, Trousers & Denims in its summer’18. The collection’18 offers... Read more

Plus size fashion gets momentum from e-com

Plus size fashion gets momentum from e-com

For decades, plus size fashion has been a neglected segment.With the rise of e-commerce and dedicated fashion portals, this segment is gradually evolving. Oversized, wide and broad are features... Read more

Junior’s Fashion Week comes to Pune

Junior’s Fashion Week comes to Pune

Junior’s Fashion Week, India’s favourite destination for kids’ fashion, will showcase the Spring 2018 collections of international brands on May 20 at JW Marriott, Pune. With the modish and trendy collection... Read more

Arvind Internet expands omnichannel services internationally

Arvind Internet expands omnichannel services internationally

Arvind Internet is expanding its omnichannel services to customers in South East Asia, West Asia, and the US. For the financial year ended March, Arvind Internet’s revenue was up 91... Read more

Mustang to reach out to customer directly through e commerce

Mustang to reach out to customer directly through e commerce

Divulging on the new collection, Lubeina Shahpurwala, co-founder, Mustang Socks & Accessories, says, “We are currently looking to set up and develop our e-commerce platform through which we want to... Read more

Mumbai to host Junior’s Fashion Week Runway on May 13

Mumbai to host Junior’s Fashion Week Runway on May 13

Mumbai is ready to host the next edition of Junior’s Fashion Week Runway on May 13. The gala to be held at The Westin, Goregaon, will mark the presence of... Read more

Bombay Dyeing to open more stores by 2018

Bombay Dyeing to open more stores by 2018

Bombay Dyeing being one of India's most endeared brands will set up more than 90 franchise stores in tier II and III cities by 2018. Aloke Banerjee, Bombay Dyeing’s chief executive... Read more

TT on an aggressive distribution network enhancement

TT on an aggressive distribution network enhancement

TT is a longstanding brand in the knitwear industry has added focus on front retail and brand end of cotton knitwear / hosiery segment. “We have a robust list of... Read more

Pepe Jeans sets a brand new equation with new channels and categories

Pepe Jeans sets a brand new equation with new channels and categories

Pepe Jeans London, one of the leading international denim-led fashion brands, is aggressively looking at retail expansion plans across the country along with enhancing its omnichannel experience. The brand is planning... Read more

MOST POPULAR NEWS
Go to top