27 May 2022, Mumbai:

The garment and textile sector is one of Vietnam's most important industries, with the country's second-largest export turnover. The industry's export value accounted for 16 percent of total GDP in 2019.

The textile sector has risen at an annual pace of 17 percent on average during the last five years.

Vietnam's lowdown on its foreign trade performance

According to the Vietnam General Statistics Office, Vietnam's apparel and textile sector generated US$39 billion in exports in 2019, an increase of nearly 8.3% year on year. The bulk of enterprises, 70 percent, are in the garment manufacturing industry.

Low labor costs and increasing textile exports to the EU, US, Japan, and South Korea are significant market expansion drivers. The garment and textile industry in Vietnam is divided into three sub-sectors: upstream (fibre production), midstream (fabric production and dyeing), and downstream (finishing) (garment manufacturing).

Because of the low quality, subsectors that generate fibers or fabric are mainly used for household consumption.

Apparel Sector: An Overview

Cut-Make-Trim (CMT) models are the primary operations in the downstream garment manufacturing industry, accounting for roughly 70% of Vietnam's overall clothing and textile sector.

CMT accounted for around 65 percent of overall exports in 2019, while more sophisticated business models such as OEM and ODM accounted for just 35 percent. Last year, Vietnam's economy grew by 7.02 percent, exceeding the National Assembly's aim and pushing the economy's scale to more than $262 billion, the highest level yet.

According to the Ministry of Planning and Investment, if the pandemic had just lasted for the first quarter of this year, the country's GDP growth would have been 6.25 percent (0.55 percentage points lower) in 2020, despite the National Assembly's approval of a target of 6.80 percent.

GDP Trekker

The GDP growth rate would drop to 5.96 percent if it continued in the second quarter (0.84 percentage points lower than the original target). This prediction was made before the outbreak in South Korea and Japan.

China, South Korea, and Japan accounted for 1/3 of Vietnam's export income and 2/3 of its import value in 2019, according to research by Bo Vit Securities Company (BSC).

If the outbreak had lasted only for the first quarter, BSC experts anticipated that the country's GDP growth rate would have been reduced by 1.05 percentage points from the objective of 6.80 percent.

Still, if it had lasted for six months, it would have been reduced by 1.55 percentage points.

The Secret Sauce of the Vietnam Apparel Sector

According to the General Statistics Office of Vietnam (GSO), the country's GDP declined to 3.80% in the first quarter of 2020, down from 6.80% in 2019. According to the International Monetary Fund (IMF), the economy would only grow by 2.70 percent this year.

According to Tran Thanh Hai, deputy general director of the Agency of Foreign Trade, Vietnam's exports and imports grew by double digits in the first quarter of 2022, reaching $176 billion, up 14.4% yearly.

During this time, exports increased by 12.9%. According to several analysts, overall export-import income might surpass $700 billion this year. 

Vietnam textile and apparel industry is on a continuous growth trajectory and keeps contributing over 15% of the country's total GDP & 18% of its exports.

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24 May 2022, Mumbai:

Industries 4.0 is coming to Vietnam's garment/apparel and textile industry! There is no better approach to achieving growth and progress in an era dominated by automation.

ALSO READ The emergence of industry 4.0 technologies in 'Textiles & Apparels'

Industry 4.0 sounds fancy but is also something to look into.

With the emerging world, with the world moving into a technology shift, inventions, and inventions, everything shifting to digital, industry 4.0.

It works by collecting and processing all the critical and essential pieces of information and data.

It helps to make a detailed study and upgrade to higher and higher quality goods and products at an effective low cost.

A recent assessment of over 300 garment enterprises in Vietnam Apparel sector by the research team of the Vietnam National Textile and Garment Group and institutes revealed that the majority of these firms were trying to stay up with Industry 4.0.

This industry 4.0 comes with a beautiful merge of the environment and the digital world. The motive is to enhance the quality of life several folds higher with this increasing population globally. With these incoming innovations, there is a perfect future.

The efficiency of working will increase significantly, along with increased productivity. Transportation and communication costs will decrease, logistics and global supply chains will improve, and the cost of commerce will decrease, which will open new markets and drive economic development, ensuring a sustainable and prosperous future for you.

And how did they manage it? Many companies prioritized increasing productivity, reducing manufacturing costs and workforce, and implementing new technology.

Not unexpected, given the increased attendance of Vietnamese garment/apparel companies at some of Saigon's technical exhibits during the previous two years.

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Garment No. 10 Corporation, also known as Garco 10, has implemented current technologies in manufacturing and administration, reducing product production time from 1,980 seconds to 1,200 seconds and 690 seconds for each item. Instead of two people managing one machine, one person controls two.

It's worth mentioning that the company's productivity has increased by 52%, while the ratio of the defective good has decreased by 8%.

Furthermore, Garco 10 has decreased working hours by one hour daily and lowered yearly manufacturing costs by 5 to 10%. A Hung JSC, meantime, has begun construction on three plants in Phu Yen Province, with a total investment of VND500 billion.

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A suit factory with a 600,000-set yearly capacity, a weaving factory, and a knitting factory will make fashion and sports clothes. Once operational, the plant will employ 4,000 locals and is projected to help the company achieve annual exports of $50 million.

The issue presently is the rate at which these technologies are accepted in industrial units.

We are aware of the critical function that rudimentary data capture and planning software has played in the garment/apparel production process up to this point.

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They were generally accepted, adopted, and relied upon for their capabilities.

However, to unlock more significant levels of production competence and gain a competitive edge, Vietnam's apparel/garment industry must embrace the sophisticated technologies altering the industrial world.

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23 May 2022, Mumbai:

Vietnam's apparel manufacturing journey dates back 20 years back. It was a very modest start as its apparel production wasn’t a significant contributor to the world supply up until the year 2005. Whilst they are currently respectfully catering to 5.7% of the world's requirements.

Vietnam's outstanding foreign trade performance in the first quarter of this year has sparked speculation about whether the Southeast Asian country has been stealing overseas orders from China as a result of sporadic outbreaks of the novel coronavirus on the Chinese mainland, which have hampered economic activity. 

VIETNAM'S SECRET SAUCE OF MAINTAINING COMPETITIVENESS 

One of the fastest-growing garment and textile markets in South East Asia, Vietnam is facing increasing competition from Asia and other markets.

In the fourth quarter of FY21, Vietnam was able to meet its target of $39 billion in textile and garment exports, a growth of 11.2 percent compared to 2020. However, this does not indicate growth in market share, says Le Tien Troung, Chairman, Vietnam National Textile and Garment Group.

Vietnam has progressed after entering the World Trade Organization in 2006, much like China did after joining in 2001, but at a slower rate. Some offshore orders for Chinese businesses, particularly in the textiles and clothing sectors, have increasingly transferred to Vietnam since the US initiated its trade war against China in 2018.

However, the worldwide division of labor has four stages, and while China seeks to secure its position at the top end of the global industrial chains and rise higher up, Vietnam is pushing its way into the low end.

In several industries, Vietnam and China have a competitive and complementary partnership.

Sector's Reality Check

Vietnam's apparel orders, for example, are dependent on textiles imported from China. Vietnam also imports vehicles and motorcycles from China and sells fruits to the country.

China has recently been moving its industrial chains to its central and western areas, and the emergence of Vietnam undoubtedly poses a threat. Mobile phone and laptop manufacturing plants in Chinese cities like Xi'an, Shaanxi province, Chengdu, Sichuan province, and Chongqing, for example, are shifting to Vietnam and India.

Electronics, solar energy, engineering machinery (Hunan province), and steel (Hunan province) are relatively established sectors in these Chinese cities and areas. If data is any indication, China's dominance in garment and textile exports is decreasing.

The trend of customers fleeing China began in 2016-2017, when rising manufacturing costs pushed up garment prices, leaving purchasers with little choice but to look for alternate places.

Inflection point

Then came COVID-19, which shocked the whole world, and garment sourcing appeared to shift to Bangladesh, India, Pakistan, and Indonesia. The Chinese textile and garment manufacturing industry's reputation was further tarnished by allegations of unethical behavior in the Xinjiang area. All of these factors conclude that China's peak form of garment manufacture (for export markets) is unlikely to resume.

The fall in China is also noticeable in the EU clothing market, but only by 1.50 percent, owing to rising labor and commodity prices. China is the single largest garment supplier to the EU, accounting for 30% of EU imports (Extra EU-27) in 2021, despite its value share falling from € 21.90 billion in 2015 to € 21.67 billion in 2021.

China's garment exports to Canada have also suffered a setback, with its proportion of Canadian apparel import values falling by 7.50 percent between 2017 and 2021.

The key takeaways are," Vietnam factories follow best indomitable practices viz incredible line systems, 6 sigmas, lean & mean manufacturing, 5S, Smart AI, Algorithmic Data Monitoring, Cost-Benefit analysis, KPI studies, ensuring arguably as a case in point a very robust production efficiency as enviable as 95% in many cases.

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26 May 2022, Mumbai:

Vietnam’s exports witness robust growth on the sound order pipeline

According to Tran Thanh Hai, deputy general director of the Agency of Foreign Trade, Vietnam's exports and imports grew by double digits in the first quarter of 2022, reaching $176 billion, up 14.4% yearly. Vietnam's economy continues to be optimistically expanding & witnessed in Q1 2022 that country is open for businesses and visitors.

During this time, exports increased by 12.9%. According to several analysts, overall export-import income might surpass $700 billion this year.

Thus the ministry of industry and trade (MoIT) has made extreme efforts to enhance how market information is delivered to exporters. On the other hand, foreign commerce is expected to increase by 6-8 percent this year to $363 billion, according to the Ministry of Industry and Trade.

FTAs Existing Pie 

The increase, according to Hai, is due to the benefits of new-generation free trade agreements (FTAs) and regional trade agreements.

Below is the list of FTAs that Vietnam has concluded by now.

Vietnam - Japan Economic Partnership Agreement. ...

Vietnam - Chile Free Trade Agreement. ...

Vietnam - Korea Free Trade Agreement. ...

Vietnam - Eurasian Economic Union Free Trade Agreement. ...

ASEAN Agreements. ... ASEAN - India FTA. ...

ASEAN - Australia - New Zealand FTA.

Shift Of Apparel Orders From China To Vietnam

The government has created various websites that provide domestic businesses with information updates. It recently unveiled the Vietnam National Trade Repository, which was constructed with the support of the UK government and themed websites hosted by Vietnamese trade offices throughout the world.

According to a news agency, the Ministry of Industry and Trade has also organized several virtual and in-person training courses on trade policies and FTAs, as well as given away various handbooks, publications, and materials that provide instructions on how to export to China and new markets such as the Middle East and Latin America.

Industry's Best Practices

A new manual is scheduled to be released soon, instructing businesses to transition from unofficial to legitimate quota export. Following strict epidemic restrictions, Vietnam's economy opened up last year.

The country's borders were reopened this year, and foreign flights were authorized, allowing specialists and tourists to come. Despite many instances in the past, a large vaccination deployment has kept severe sickness and deaths to a minimum, allowing industries to continue operating.

While Vietnam's economy is booming and traffic in key cities is approaching pre-pandemic levels, external concerns threaten to derail the country's progress.

Downward Growth Risks The Nation Will Have To Mitigate

1. Given the recent global IMF downward revision, global growth is now likely to stabilize into a 3.6% growth trajectory over 2022-23.

2. Given elevated persistent global inflation, the prospect of competitive exchange-rate appreciations looming larger is a real concern.

In face of the current sanctions against Russia which have upended the global economy, the foregone conclusion is that Vietnam's economy will not be spared the fallout.

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24 May 2022, Mumbai:

According to govt sources, approx 2.5 million workers are engaged in this sector, authorities' support & assistance is paramount to factories in providing all critical support i.e. skill training, getting to receive cutting-edge manufacturing know-how advancing technology access to small businesses, and much more.

Most noteworthy is," The average skills of workers are par excellence giving the nation a competitive edge in the competitive landscape.

The United Nations Climate Change Conference was held in Glasgow, Scotland, in early November 2021.

Vietnam's Prime Minister, Pham Minh Chinh, reaffirmed his commitment to being a member of the global climate change solution.

COST-EFFECTIVENESS HELPS VIETNAM MAINTAIN COMPETITIVENESS 

The government plans to boost the percentage of renewable energy in its total primary energy supply to at least 20% by 2030 and 30% by 2045, phase out coal-fired power generation, and achieve net-zero emissions by 2050.

Trade can play a crucial role in addressing the climate change that Vietnam textile sector is experiencing and will face in the coming years.

Several enterprises and manufacturers have increased their e-commerce exports to capitalize on the channel's recent growth.

Despite their quick adaptation to the new conditions, companies face hurdles such as a lack of understanding of export regulations, rigorous product quality standards in international markets, and other shipping, payment, and customer service issues.

How Real Is the Shift Of Apparel Orders From China To Vietnam

Vietnam's T&C outstanding foreign trade performance in the first quarter of this year has sparked speculation about whether the Southeast Asian country has been stealing overseas orders from China supply chains as a result of sporadic outbreaks of the novel coronavirus on the Chinese mainland, which have hampered economic activity.

For Vietnamese enterprises and manufacturers, all of these challenges have influenced the rate of cross-border e-commerce growth.

According to the Ministry of Industry and Trade, import and export activities will confront both opportunities and problems in the second half of 2021.

Given the unpredictability of the COVID-19 outbreak in Southeast Asia, whether the pandemic is brought under control will be a significant factor driving import and export growth.

These obstacles do not prevent Vietnamese companies from expanding their cross-border e-commerce operations.

Some of the challenges stacked on the labour resources are the increasing number of FDI in other competitive sectors getting increasingly attractive such as Electronics providing distinctively better working conditions and less tedious jobs.

How Vietnam In 2021 Became 2nd Biggest Apparel Supplier 

Vietnam's e-commerce offers promising export opportunities. According to Amazon's newest report, the number of Vietnamese small and medium-sized firms (SMEs) selling on Amazon climbed by 15% from September 1, 2020, to August 31, 2021.

The ministry has organized trade promotion and supply and demand, connecting activities in Vietnam and other international markets.

One of the fastest-growing garment and textile markets in South East Asia, Vietnam is facing increasing competition from Asia and other markets.

In addition, in 2019, the Ministry of Information and Technology's IDEA signed a cooperative deal with Amazon Global Selling Vietnam.

In the fourth quarter of FY21, Vietnam was able to meet its target of $39 billion in textile and garment/apparel exports, a growth of 11.2 percent compared to 2020.

However, this does not indicate growth in market share, says Le Tien Troung, Chairman, Vietnam National Textile and Garment Group.

In 2021, the two want to enhance their relationship to help Vietnamese businesses fully exploit the possibilities of cross-border e-commerce.

Vietnam Is An Idea Whose Time Has Arrived

In the fourth quarter of FY21, Vietnam was able to meet its target of $39 billion in textile and garment/apparel exports, a growth of 11.2 percent compared to 2020. However, this does not indicate growth in market share, says Le Tien Troung, Chairman, Vietnam National Textile and Garment Group.

According to one of AEPC's reports," Vietnam factories seek a lead time of 90 days from the date of order to delivery and they do work on 45 days lead time in cases of Never out of Stock orders. The factories claimed that they are booked with orders for 6 to 8 months.

There are small medium and bigger factories, they classify a factory with 300 workers as MSME and the capital investment also has been taken into account for this classification.

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23 May 2022, Mumbai:

A prominent German business getting T-shirts from China for years contacted a supplier in Tirupur, Tamil Nadu's famed textile industry, a few months ago.

Following inquiries and due research, the firm offered Warsaw International a four-thousand-piece T-shirt purchase for this fiscal year.

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The worldwide COVID-19 epidemic has spurred the 'China Plus One' supply chain diversification plan, providing chances for Indian players. Furthermore, the shifting importance of China's manufacturing sector in the global export value chain is creating opportunities for Indian businesses.

According to Raja Shanmugham, managing director of Warsaw, the brand stated it wished to relocate a portion of its business away from China but refused to specify why.

"Many Tirupur-based suppliers have witnessed higher orders from worldwide companies in recent months, and we believe this is partially related to their decreasing reliance on China."

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"However, no consumer has stated it so explicitly," he claims.

China's strategic change towards manufacturing high-value goods from low-value goods is evident in both inter-sector, such as the shift to capital goods from footwear, and intra-sector, such as the shift to man-made fibers from home textiles or cotton apparel.

China's strategic change towards manufacturing high-value goods from low-value goods is evident in both inter-sector, such as the shift to capital goods from footwear, and intra-sector, such as the shift to man-made fibers from home textiles or cotton apparel.

A drop in Chinese textile and apparel exports to the US from January to June, despite no change in the value of India's shipments, has sparked hopes of a shift in US orders from the world's most populous nation to this country.

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India, Vietnam, Cambodia, and Bangladesh are among the few nations whose textile and garment exports to the United States increased in the first half of 2008, even though the world's largest economy declined. Orders from China are shifting to neighboring nations, namely Bangladesh and India. We might see an additional $1 billion in exports from India, according to Rajan Hinduja, MD of Bangalore-based Gokaldas Exports.

According to him, US importers are vigorously exploring alternative sourcing countries, and India is at the top of their list. According to official US figures, the US imported textiles and clothing worth $24.37 billion in January-June 2008, down 5.1 percent from $25.7 billion.

Imports increased from $ 46.93 billion to $ 53.12 billion between 2004 and 2007. In the mid of this year, India's exports to the United States stayed virtually unchanged at $1.42 billion, up from $1.41 billion, while Vietnam's increased to $824 million from $668 million. We received supplies from Bangladesh.

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24 May 2022, Mumbai:

An Overview

They have their own spinning mills but they don’t produce good quality yarn due to obsolete machinery. And they have limited processing houses to process the fabrics hence they bank on ready-to-cut fabric imports.

90% of the factories work on CMT (Cut, Make & Trim) base productions, the sourcing company’s source fabrics from China, Korea, India, Pakistan, Italy, and Turkey.

Almost all the factories employ 70% women workers.

It's business as usual in the laser section of one of Vietnam textile sector's biggest textile mills, where Phan Chi Cao, 27, works.

He employs laser equipment to "dry process" denim clothing, which is a technique for achieving the cool, faded look that certain customers like.

Cao can dry roughly 300 jeans per day using the lasers, a significant increase in production over the labor-intensive traditional technique, which only allows for 20 to 30 per day and exposes workers to dangerous chemicals.

This laser equipment was introduced to the facility by Cao's business, Phong Phu International (PPJ), as part of a long-term strategy to assist Vietnam's textile sector to rise as a key textile sourcing hub in Asia.

Apparel 4.0 & Digitisation Adoption

The Vietnam Improvement Program, an IFC project to increase resource efficiency in the Vietnamese apparel/garment, textile, and footwear sector, aided PPJ's efforts in 2016.

IFC now works with 70 manufacturers that serve significant retailers and garment businesses, such as VF Corp., Target Corp., Puma, New Balance, and Adidas, collaborating with the Clean Technology Trust Fund and Korean Green Growth Trust Fund. IFC initially analyzed PPJ's ability to achieve optimal energy and water efficiency.

Following this study, IFC assisted the firm in adopting upcoming technology and best practices that would help it achieve its objective. In 2016, and 2017, the business adopted various resource-efficient solutions at its Thanh Chau wash facility, which employs 14,000 people and supplies denim, knit, and woven clothes to worldwide brands.

global competitiveness to take on rivals such as Bangladesh

In terms of Vietnam apparel/garment exports, it is becoming increasingly significant. The country is presently one of the top five worldwide garment exporters, with most of its wares going to the United States, the European Union, and Japan.

The textile and garment industry is one of Vietnam's largest and most important industries, contributing significantly to the country's economic growth.

Approximately 2.7 million people are directly employed by the business (75 percent of them are women), and millions more are indirectly supported by remittances given to employees' relatives across the country.

Challenges & Opportunities

The textile and garment firm in Vietnam has a long history and heritage. Women in the nation had known sericulture for hundreds of years, weaving thread into exquisite silk with simple equipment, yet their clothing was full of subtle details and great value.

Vietnam's textile sector, on the other hand, began to flourish in the Northern area in 1958 and the Southern region in 1970. The French developed various large industries in Nam Dinh, HaiPhong, and Hanoi.

To combat the high cost of raw materials, the Vietnamese government has already begun investing heavily in developing support industries, and Vietnam was the second-largest investor in shuttleless looms and the largest investor in-ring spindles and open-end rotors among ASEAN countries from 2006 to 2015.

The country's knitting industry has also grown significantly. In Vietnam's Ninh Thuan province, a cotton manufacturing factory called "Rang Dong Industrial Park" with a land area of 1,500 hectares and a capital investment of US$400 million has been created, with an annual production value of US$3 billion.

Vietnam is exporting majorly to the USA (45%), EU (17%), Japan (12%), South Korea (10%), China (3%), Hong Kong (1%), and Mexico(1%), etc.

“ MADE IN VIETNAM” is an envious global tag, this respect was earned on the back of their efficiency & enduring quality.

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23 May 2022, Mumbai:

COST-EFFECTIVENESS 

Vietnam surpassed Bangladesh as the world's second-largest garment exporter for the first time in 2020. Bangladesh has been the second-largest clothing exporter for five years before 2020.

Nonetheless, Vietnam's edge over Bangladesh in 2020 was tiny, and both nations' garment exports were overshadowed by China's.

Furthermore, they decreased in 2020, but at half the rate of Bangladeshi exports. In this editorial, Robin Anson looks at the elements that have contributed to the success of Vietnamese textile exporters, including considerable foreign investment, particularly from China.

However, he points out several red flags, such as supply limits caused by manufacturing shutdowns ordered to stop the spread of the COVID-19 epidemic.

Due to its strategic location and advantages in shipping, competitive labor, and production costs, Vietnam has become a top destination for manufacturing investment.

In the garment enterprises, 40% of investment has been made through FDI.

Vietnam's growth is how realistic!

Global businesses seek to diversify, increase the resiliency and connectivity of their supply chains, and reduce reliance on a single country. Compared to other Southeast Asian countries, Vietnam has international airports, seaports, and rail ties that help with manufacturing and transportation.

Manufacturing and processing continued to lead in foreign direct investment (FDI) in 2020, accounting for 58.2 percent of total FDI.

With its help, Vietnam's economy is expected to regain speed in 2022, with a GD 6.5 percent GDP growth.

LOW DOWN ON BANGLADESH MARKET

Bangladesh’s exports to traditional markets including the US and the EU grew in 2021. Exports to its single largest market, the US surged from 17.5 percent in 2018 to 20.30 percent in 2021, says Faruque Hassan, President, BGMEA.

It totaled $7.28 billion in 2021. The share of woven garment exports was worth $4.65 billion while knitwear exports totaled $ 2.62 billion. For the first time, Bangladesh’s RMG export to the US exceeded $7 billion in a year, a growth of 43.62 per cent compared to 2020, says Hassan.

COVID-19 caused substantial supply chain disruptions in the industrial industry in 2020-2021.

What works in the Vietnam industry favour

Manufacturing production in Vietnam has been reduced due to temporary firm closures, transportation issues, and employee shortages. Several fundamental elements drive the manufacturing business.

To begin with, Vietnam is marketed as a low-cost producer with cheap labor expenses.

Vietnam's labor expenses are half that of China's, at US$2.99 (VND 68.000) per hour against US$6.50 (VND 148.000) per hour. This helps cement Vietnam's position as a more cost-effective alternative to its regional competitors.

Second, Vietnam has a vast and well-educated worker force, making it a desirable industrial hub. Furthermore, the government has sponsored further vocational education and training programs to equip the workforce better.

The government has implemented various policies and programs in response to the present labor crisis and the lack of trained personnel in critical areas such as IT.

Reflecting on the Better Work ethos Vietnam continues to strive to accomplish ongoing competitiveness both by improving the working conditions in the country’s garment industry also by unmatchable productivity/indomitable work spirit.

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14 May 2022, Mumbai:

Emerging Paradigm

Cotton prices in India have risen due to strong demand from the cotton market, diminishing stockpiles, and a 10% import levy on cotton.

According to one ET report," Apparel industry is facing a severe problem of the high cost of cotton yarn and fabrics. During the last couple of months the cotton prices have been hiked up".

In July, the price of cotton increased by $3,800 per confection in 15 days. The sharp rise in prices has thrown the business into disarray and rendered Indian exporters uncompetitive.

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Demand Supply Equation

Cotton prices have been rising steadily since January 2021, peaking last month. Because of the increased demand, the CCI's cotton supply has been depleted to about 9 lakh bales (which would be its opening stock at the start of the following season on October 1), driving up prices.

According to Pradeep Kumar Agarwal, chairman and managing director of CCI, the corporation had close to 115 lakh bales of cotton before the current season in October 2020 and bought 92 lakh bales during the season.

Furthermore, the United States, the world's largest cotton producer, fell behind due to a severe drought in Texas last year, forcing cotton prices in India to firm up starting in December 2020.

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Competitive Landscape

The SIMA chairman also urged the central government to promptly remove the 10% import charge on cotton to influence market attitude and prevent additional damage to the cotton textile value chain. The Cotton Association of India had also requested that the government remove the cotton customs levy.

Due to the introduction of import duties, there is a shortage of extra-long-staple and non-ELS contamination-free sustainable cotton, as India seldom produces these types of cotton.

Pakistan, India, Bangladesh, Vietnam, Turkey, and China are predicted to have the fastest-growing cotton industries and demand. Because of their low labor costs, the first four countries named are becoming global textile hubs.

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China Dominance

All trade associations hailed the center for their kind support for withdrawing 10% import duty on Cotton – 5% Basic Customs Duty (BCD) and 5% Agriculture Infrastructure and Development Cess (AIDC), including 10% Social Welfare Cess (SWC) on both amounting to 11% import duty on cotton – from 14th April 2022 to 30th September 2022.

The rising affluence of China's and Turkey's populations will make production less competitive. It is expected that domestic production will not be able to meet the complete demand of China's industry, forcing the country to increase imports.

China is the world's largest market for imported cotton lint, accounting for 29 percent of global imports. Viet Nam was ranked second in the ranking, with a 12 percent global importance share.

Pakistan came in second with an 11 percent stake. In 2020, the average cotton lint import price was $1,706 per tonne, down -5.3 percent from the previous year.

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State Of Affairs

The major importing countries' average prices differed little. The following costs were recorded in major importing nations in 2020: India and China, with Vietnam and Turkey among the lowest.

Muted demand from China is likely to affect India's total cotton yarn outbound shipments and the export unit realizations.

There is no price parity between cotton and yarn right now. As a result, spinning mills will be forced to raise yarn pricing shortly to avoid losses. Under Minimum Support Price operations, CCI procured over 25% of the Indian cotton crop.

The total cost of this purchase would be Rs.43,000 per sweet. The current selling price is out of the ordinary.

CCI might have maintained prices even after accounting for carrying expenses and fair profit margins.

Optimistic Note

CITI Chairman hopes that the T&C Industry would be able to achieve the export target of US$ 16.96 billion (25% increase) set for the cotton value chain and the total textiles and clothing export target of US$ 47.029 billion (18% increase) set for the financial year 2022-23 with the help of availability of cotton fiber and other raw materials at internationally competitive prices to the Indian T&C Industry.

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