MAR 2021.pdf - aepc india

EAI 02 ISSUE 16

APPAREL EXPORT PROMOTION COUNCIL MAGAZINE I MARCH 2021

Flexible labour laws and product innovations to boost India’s apparel exports

FOCUS COUNTRY

M A U R I T I U S

100

Target Colombia’s fashion industry: Indian envoy urges apparel exporters

Huge potential for growth of apparel exports to Mexico: Indian ambassador

AEPC hails Union Budget 2021-22

Karnataka organizes Vastra Tek-Apparel & Textile Conclave

APPAREL / CHAIRMAN MESSAGE

2 / APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | MARCH 2021

While the Indian economy along with the apparel exporting industry is poised for strong recovery in the coming fiscal post pandemic, much

depends on how we navigate going ahead – wheth-er we take the lead to form the new world order or miss the boat again.

As Hon’ble Prime Minister Shri Narendra Modi recently said that the world post-Covid is turning out to be very different and remaining isolated from the global trends would be counterproductive, the Indian apparel exporters must need to review their strategy.

The Council has already taken a lead in identifying these emerging trends and has also executed some of its insights like focus on manmade fibre (MMF) based garments and 24x7 virtual exhibition platform. It’s now up to the exporter friends to take the cue.

On its part, the Council has been continuously engaged with the government to get all the support needed for our industry whether it be Rs 10,683 crore Production Linked Incentive (PLI) scheme for MMF segment and technical textiles, establishment of seven Mega Investment Textile Parks, allocation of Rs 13,000 crore for Remission of Duties and Taxes on Exported Products (RoDTEP), or hosting online B2B meetings between apparel exporters and foreign buyers in association with Indian embassies abroad.

A closer look at the Union Budget 2021-22 revealed that certain things had to be taken up with the government for an urgent review. AEPC Export Promotion Chairman Mr Sudhir Sekhri and former AEPC Chairman Mr HKL Magu met Textiles Secretary Mr UP Singh on February 17 to discuss these issues. Another delegation comprising Mr

DEAR FRIENDS,

Sudhir Sekhri, former AEPC Chairman Mr Virendra Uppal and Executive Committee member Mr Harish Ahuja met Hon’ble Minister of Commerce and Industry Shri Piyush Goyal and Hon’ble Minister of Textiles Smt Smriti Zubin Irani on February 23 to discuss the same.

The provision under Custom notifications allowing duty free import of inputs like trimmings and embellishments via Export Performance Certificate (EPC) issued by AEPC has been withdrawn. Now duty has to be paid for their import. Further, the Budget has brought in a new condition for import of tags, labels, stickers, belts, buttons, hangers and printed bags. It requires the exporter to submit a bond for each import consignment that imported articles will be exported within six months of importation.

The government has also restricted the export sale on payment of IGST to a notified class of taxpayers or specified supplies of goods or services. On all these matters, the Council has requested the government for a review. Besides, we have also apprised the government of our concerns related to Focus Product Incentive Scheme (FPIS) under PLI

AEPC Chairman Dr A Sakthivel

APPAREL / CHAIRMAN MESSAGE

APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | MARCH 2021 / 3

scheme; market access opportunities under FTA/ CEPA with EU, UK, USA, Canada and Australia; concerns pertaining to Technology Upgradation Fund Scheme (TUFS); urgent announcement of RoDTEP rates; Special Advance Authorisation for apparel sector on self-declaration basis; and RoSL shipping bills not showing on DGFT portal.

Meanwhile, I must sincerely thank the Ministry of Commerce for accepting one of our major recommendations – declaring Noida as a Town of Export Excellence for apparel products, a move that will help promote outbound shipments. This entitles the common service providers in the area to avail the Export Promotion Capital Goods (EPCG) scheme, which in turn would enable them to provide advanced technologies and services to the 700 existing apparel units in Noida. Further, recognized associations of units will be provided financial assistance under MAI scheme, on priority basis, for export promotion projects, for marketing, capacity building and technological services. We have urged the Commerce Ministry for similar tags for Faridabad, Delhi and Erode. Dr. A Sakthivel, Chairman, AEPC

Last month, we hosted online B2B meetings with brands and buyers based in two Latin American countries – Mexico and Colombia. With great support from Indian embassies in these two countries, the apparel exporters interacted with the importers there and tried to understand the emerging trends and how Indian exporters could do better. We have a similar B2B meeting lined up with Germany on March 16. Please join in.

I am happy to announce that I have been elected unopposed as President of Federation of Indian Export Organisations (FIEO). My second chance to lead this apex export organisation comes at a time when Indian exports are gradually reviving from the downturn.

We, at the Council, remain committed to the cause of apparel exporters in the country. Please share your suggestions on [email protected].

Wish you a safe and happy Holi. Let the colours of Holi bring health and prosperity!

Content & DesignDFU PublicationsNew DelhiEmail: [email protected]

Printing Press: Royal Press, B-81, Okhla Industrial Area, Phase-I New Delhi-110020e-mail: [email protected]

CHAIRMAN AEPCDr. A. Sakthivel

CHAIRMAN EPMr. Sudhir Sekhri

Secretary General, AEPCDr. L. B. Singhal

ADVISOR AEPCMrs. Chandrima Chatterjee

PUBLISHERApparel Export Promotion CouncilApparel House, Sector-44,Institutional Area,Gurugram,HARYANA – 122003.Phone: 0124-2708000www.aepcindia.com

Content & DesignDFU PublicationsNew DelhiEmail: [email protected]

Printing Press: Royal Press, B-81, Okhla Industrial Area, Phase-I New Delhi-110020e-mail: [email protected]

CHAIRMAN AEPCDr. A .Sakthivel

CHAIRMAN EPMr. Sudhir Sekhri

Secretary General, AEPCMr. Sanjeev Nandwani

Additional Secretary General, AEPCMrs. Jyoti Kaur

ADVISOR AEPCMrs. Chandrima Chatterjee

PUBLISHERApparel Export Promotion CouncilApparel House, Sector-44,Institutional Area,Gurugram,HARYANA – 122003.Phone: 0124-2708000www.aepcindia.com

APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | MARch 2020

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EAI 01 ISSUE 07

APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | MARch 2020

Market Intelligence on Cambodia – An India Opportunity

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EAI 01 ISSUE 07

FOcUS cOUNTRY

THE USA

Manmade Fibres: The Next TrendManmade Fibres: The Next Trend

4 / APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | MARch 2020

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EAI 02 ISSUE 16

APPAREL EXPORT PROMOTION COUNCIL MAGAZINE I MARCH 2021

Flexible labour laws and product innovations to boost India’s apparel exports

FOCUS COUNTRY

M A U R I T I U S

100

Target Colombia’s fashion industry: Indian envoy urges apparel exporters

Huge potential for growth of apparel exports to Mexico: Indian ambassador


Karnataka organizes Vastra Tek-Apparel & Textile Conclave


EAI 02 | ISSUE 16 | March 2021 | Pages 60

C O N T E N T S

32 | MARKET• Post-Brexit UK-Europe trade to get more

costly with extra duties, taxes

34 | RETAIL• Retail owners risk stable revenues as they

venture into volatile retail business• Burberry’s retail sales fall by 9%• Mango to foray into homeware market• American Eagle to shut 250 mall-based stores• H&M teams up with Lee for sustainable kids wear • Levi’s to ramp up wholesale strategy across

Europe• Brand reset and digital marketing help Superdry

progress despite pandemic effects• Debenhams shuts all stores in UK• Frasers’ stake in Hugo Boss increases to 15%• Bestseller launches new multi-brand platform• VF Corp’s Q3 revenue drops by 6 per cent

40 | SUPPLY CHAIN• Deeper ties with suppliers to make industry

more agile

42| SUSTAINABILITY• Synthetic free fashion to help industry

become more sustainable

44| LABOUR LAWS• Need for new laws to uphold human

rights in fashion supply chain

46| SECTOR FOCUS• Global T-shirts market to grow at 11%

CAGR over the next decade: Study

48| E-COMMERCE• Moving away from Discounts, Online

Shoppers Focus on Safety and quality

50| TRENDS• Fashion to get more digital in 2021

52| GST UPDATE• NO ITC ON CANTEEN SERVICES & BUSINESS

PROMOTION EXPENSES AND OTHER UPDATES

58| NOTIFICATIONS• Ministry Notifications

02| CHAIRMAN MESSAGE

06 | BROADCAST (RMG UPDATE)• RMG exports decline

by 10.73%

07 | BROADCAST (IIP UPDATE)• Textile manufacturing declines by

7.2% in December 2020

08 | REPORT• Huge potential for growth of

apparel exports to Mexico: Indian ambassador

• Target Colombia’s fashion industry: Indian envoy urges apparel exporters

• AEPC compliments RBI for positive economic outlook

• Karnataka organizes Vastra Tek-Apparel & Textile Conclave

14 | BUSINESS • Lack of orders, factory closures

threaten Myanmar’s garment industry future

16 | LUXURY • Entry of new sellers drives growth of

India’s luxury resale market

18 | COVER STORY• Flexible labour laws and product

innovations to boost India’s apparel exports

22 | SPECIAL STORY• AEPC hails Union Budget 2021-22

24 | FOCUS COUNTRY• Mauritius: A growing economy

with robust industrial and tourism sectors

30 | INSIGHT• Pandemic brings comfort in focus

as demand for casualwear rises


APPAREL /THE BROADCAST

RMG exports decline by 10.73%

RMG exports declined by 10.73 per cent to US$ 1295.70 million in January 2021 against the corresponding month of January, 2020, which was US$ 1451.42 million. Cumulative RMG exports in dollar terms during April-January, 2020-21 declined by 26.37 per cent to $ 9,495.46 million. In rupee terms, export for the month of January 2021 declined by 8.48 per cent to Rs 9472.77 crore as against Rs. 10350.60 crore. in January, 2020 . RMG exports in rupee terms during April-January, 2020-21 registred a decline of 22.46 per cent to s Rs 70,431.02 crore.

India’s RMG Export to World

Month

FY 2019-20 FY 2020-21MoM Growth of

2020-21 over 2019-20 (%)

In INR Crore

In US$ Million

In INR Crore

In US$ Million INR US$

April 9,786.03 1,409.53 9,62.92 126.31 -90.16 -91.04

May 10,661.45 1,528.02 3,908.8 516.63 -63.34 -66.19

June 8,560.93 1,232.87 6,083.7 803.37 -28.94 -34.84

July 9,390.06 1,364.67 7,973.06 1,063.17 -15.09 -22.09

August 8,966.63 1,260.32 8,093.6 1,083.89 -9.74 -14

September 7,702.57 1,079.79 8,745.34 1,190.14 13.54 10.22

October 7,866.45 1,107.34 8,648.44 1,177.33 9.94 6.32

November 7,543.67 1,055.77 7742.94 1,043.24 2.64 -1.19

December 10.020.21 1,407.48 8,799.45 1,195.68 -12.18 -15.05

January 10,350.60 1,451.42 9,472.77 1.295.70 -8.48 -10.73

Total (April-Jan) 90,837.30 12,895.58 7,0431.02 9,495.46 -22.46 -26.37

Source: DGCI&S, Kolkata, 2020


• Manufacturing of Textiles for the month of December, 2020 is 114.6 which has shown a decline of 7.2% as compared to December, 2019.

• Manufacturing of Textiles for the financial year Apr-December, 2020-21 is 82.5 which has shown

a decline of 29.2% as compared to the financial year Apr-December, 2019-20. • Manufacturing of Wearing Apparel for the month of December, 2020 is 136.7 which has

shown a decline of 20.0% as compared to December, 2019. • Manufacturing of Wearing Apparel for the financial year Apr-December, 2020-21 is 98.3 which

has shown a decline of 37.3% as compared to the financial year Apr-December, 2019-20.

Manufacture of

Textiles

MoM Growth Rate

(In %)

Manufacture of Wearing Apparel

MoM Growth Rate

(In %)

Month 2019-20 2020-21 2020-21 / 2019-20 2019-20 2020-21 2020-21 /

2019-20

April 119.8 5.3 # 165.1 6.3 #

May 115.6 31.5 # 163.5 97.5 #

June 110.1 50.3 -54.3 167.3 100.9 -39.7

July 113.8 97.0#* -14.8#* 166.8 118.9#* -28.7#*

August 115.0 95.9#* -16.6#* 158.6 120.5#* -24.0#*

September 115.2 101.7#* -11.7#* 144.2 123.9#* -14.1#*

October 115.9 107.0* -7.7* 137.1 120.9* -11.8*

November 119.7 108.0* -9.8* 139.1 112.9* -18.8*

December 123.5 114.6* -7.2* 170.8 136.7* -20.0*

Total (Apr-Dec)

116.5 82.5 -29.2 156.9 98.3 -37.3

Source : CSO, 2020* Figures for December 2020 are Quick Estimates.

Textile manufacturing declines by 7.2% in

December 2020


APPAREL / THE BROADCAST

APPAREL / REPORT


Indian ambassador to Mexico Mr Manpreet Vohra said the bilateral trade between the two countries is rising and that there is huge potential for growth of Indian apparel exports to Mexico.

Speaking at ‘India-Mexico Synergies in Apparel and Textiles’, a virtual B2B meeting organized by Apparel Export Promotion Council (AEPC) and Embassy of India, Mexico City, Mexico, Mr Vohra said that the bilateral trade has grown 46 per cent to about $10 billion since 2014.

“Mexico is now India’s largest trading partner in Latin America and the second largest in entire America after the US, having overtaken Canada and

Huge potential for growth of apparel exports to Mexico:

Indian ambassador

Brazil. Our trade is also fairly well balanced with only about $1 billion in India’s favor,” Mr Vohra said.

The Ambassador said that one of the most important products in the bilateral trade basket is garments and textiles, and for which India is among Mexico’s top suppliers. In 2019, Mexico imported $381 million worth of textiles and clothing items from India.

“However, there is much more room for growth borne out by the fact that in 2019 Mexico imported over $10.7 billion worth of garments and textiles from all over the world. Even 2020 data shows from January to November that despite the pandemic Mexico has still imported $7.9 billion of these items.

APPAREL / REPORT


India therefore can surely increase its share in the import matrix of Mexico,” the envoy said.

India is one of the leading manufacturers and exporters of high quality and competitively priced garments and textiles, he said and added that the size of India’s domestic market alone is $100 billion. Further, he said that both the domestic market size and India’s share in global apparel trade, currently 5 per cent, are likely to triple by 2024-25.

“More than 600 companies in India are certified to produce high quality Personal Protective Equipment (PPE) today. Global market for this is expected to be over $92 billion by 2025 up from only $52 billion in 2019. This is another good opportunity for Indian and Mexican companies to collaborate,” the India’s envoy in Mexico said.

Dr A Sakthivel, Chairman, AEPC said, “At the start of the coronavirus pandemic in India in March, the production of medical textiles in the country

was zero. Within 30 days with the help of Hon’ble Minister of Textiles Smt Smriti Zubin Irani and our exporters, the production of medical textiles began. And, by June India became the world’s second largest manufacturer of medical textiles.”

The Chairman further said that cotton garments account for 85 per cent of India’s total apparel exports while the global market is exactly the opposite with 85 per cent trade in manmade fibre (MMF) garments and 15 per cent cotton garments. On our request, the Government has now started a Production Linked Incentive (PLI) scheme. For this, they have identified 40 HS codes for MMF garments and 10 HS codes for technical textiles,” Dr Sakthivel said.

Mr Sudhir Sekhri, Chairman (Export Promotion), AEPC, said, “Of the 10 top apparel products that are being exported from India to Mexico only one item is a MMF fabric, all other items are cotton fabrics. This is where the gap is and where we see growth.” n

APPAREL / REPORT


Indian ambassador to Colombia Mr Sanjiv Ranjan said that there is a huge potential for Indian apparel exporters in Colombia, particularly in its “resilient and innovative” fashion industry with domestic sales of about $7 billion.

Speaking at ‘India-Colombia Synergies in Apparel and Textiles’, a virtual B2B meeting organized by Apparel Export Promotion Council (AEPC) and Embassy of India, Bogota, Colombia, on Monday evening, Mr Ranjan said that the readymade garment exports from India were limited to around $21 million in 2019.

Target Colombia’s fashion industry: Indian envoy urges

apparel exporters

“India’s apparel exports to Colombia is just 3 per cent of its global imports. This does not really reflect the strength of what our sector stands for. We have a huge untapped potential in this sector which requires to be explored and utilized by our exporters,” he said.

Highlighting the growing popularity of Indian apparels in Colombia, Ranjan said that the apparel exporters should focus on Colombia’s fashion industry that accounts for 9.4 per cent of the country’s industrial GDP and employs about 600,000 people. The annual household expenditure

APPAREL / REPORT


on fashion in Columbia is roughly 24.3 trillion Columbian peso.

“It is one of the most vibrant sectors of the region. Columbia has a robust network of almost 14,000 companies in the fashion industry, mostly in the small and medium sized categories. Even during the peak of the pandemic in June 2020, clothing accounted for nearly 57% of the total fashion spending followed by jewelry. While the government is trying at its level, the private sector should find out how to contribute to this resilient and innovative sector,” the ambassador said.

Mr Ranjan congratulated AEPC for setting up a virtual exhibition platform to showcase Indian apparels to overseas buyers at a time when physical presence is restricted.

“I am sure that this virtual, 24x7 platform offers more experience at one place, with the flexibility for importers to zoom in and look at the various products on offer. This will go a long way in further energizing our bilateral engagement in the apparel sector,” he said.

AEPC Chairman Dr A Sakthivel informed the attending Colombian brands and buyers that AEPC through its virtual platform will work as a bridge between the Indian apparel exporters and Colombian apparel importers. About 320 apparel exporters have already put up their products for exhibition on the platform, he said.

“On our request, the government has come out with Production Linked Incentive (PLI) scheme for manmade fibre (MMF) based garments. We do 85% cotton garments and only 15% MMF garments, while the global apparel demand is exactly the opposite. Very soon we will see a rise in exports of MMF garments from India,” Dr Sakthivel said.

Mr Sudhir Sekhri, Chairman (Export Promotion), AEPC, said, “Of the top 10 apparel imports from India to Colombia, only two are in the MMF category and the rest are cotton garments. Perhaps this is where Bangladesh and Vietnam are scoring ahead of us. This is one area that we are trying to address very quickly along with the help from the government.” n

APPAREL / REPORT


AEPC compliments RBI for positive economic outlook

Dr A Sakthivel, Chairman, AEPC complimented Reserve Bank of India (RBI) for sharing a positive outlook for the economy and said that its decisions will improve export competitiveness.

“I am happy to note that the measures announced by RBI in its bi-monthly monetary policy decision today will enhance export competitiveness and ease of doing business for exporters,” Dr Sakthivel said thanking RBI Governor Shri Shaktikanta Das.

The Chairman welcomed the overall positive and growth oriented statements in today’s developmental, regulatory and monetary policy of the RBI. The decision to retain repo rate at 4 per cent, bank rate at 4.25 per cent and reverse repo at 3.35 per cent, and steps taken

to maintain the inflation at the tolerance band of 4 per cent will help investors, he said.

“The improvement in capacity utilization in the manufacturing sector and flow of financial resources to the commercial sector will strengthen the efforts of the industry to bring back normalcy in manufacturing and exports,” Dr Sakthivel said.

He expressed confidence that the apparel industry will have full support and corrective measures through RBI’s objective of reviving the economy with measures relating to (i) enhancing liquidity support to targeted sectors and liquidity management; (ii) regulation and supervision; (iii) deepening financial markets; (iv) upgrading payment and settlement systems; and (v) strengthening consumer protection. n

APPAREL / REPORT


Karnataka organizes Vastra Tek-Apparel & Textile

Conclave

The Department of Handloom and Textiles, Government of Karnataka organized the Karnataka Vastra Tek-Apparel & Textile Conclave in association with FICCI Karnataka State Council on February 23, 2021.

In the inaugural session, Hon’ble Minister of Textiles Smt Smriti Zubin Irani said Karnataka reigns in the realm of silk. She elaborated on the growth of the silk sector in the state.

Dr. A Sakthivel, Chairman, AEPC said, Karnataka plays a vital role in apparel exports and also provides job opportunities to 1 million people. n

APPAREL / BUSINESS

Lack of orders, factory

closures threaten

Myanmar’s garment

industry future


Before COVID-19, the Myanmar apparel sector employed over 700,000 workers in over 700 apparel factories. The sector created jobs faster than any

other part of the economy, reports, International Labor Organization. However, pandemic-induced slowdown forced many factories to shut down and the recent military coup added more uncertainty to the sector. Thousands of workers employed in Myanmar’s garment factories are currently demonstrating against the military coup, reports Clean Clothes Campaign. Hundreds of protestors are engaged in a standoff with riot police as they march to Yangon University.

IN A QUANDARYThis has driven brands operating in the country

into dilemma about whether to continue operating in the country or cut all ties with it. A representative for British multinational Marks & Spencer, The Fair Wear Foundation has urged member brands to ensure workers get due payments and have a safe work environment.

Swedish giant H&M is urging suppliers to ensure the safety of employees. The brand is also collaborating with UN agencies, humanitarian organizations, diplomatic representatives, human rights experts and other multinational companies to support positive developments in Myanmar. Myanmar fashion companies are also rethinking their expansion plans. Adopting a wait and watch policy, so far, they have exported over half of their apparels under the Everything But Arms framework. However, they are unlikely to review Myanmar’s eligibility under this act, says Politico.

APPAREL / BUSINESS


NEED FOR A SURGICAL APPROACH Meanwhile, Myanmar is focusing on the US

market which benefits from some preferences under the US GSP or Generalized System of Preferences, program. The country has approved some of Myanmar’s individual and military-controlled companies for investments. One of these is Myanmar Economic Holdings which owns the PyinOoLwin garment factory.

Peter Kucik, Sanctions Expert, Ferrari & Associates, believes Myanmar’s garment industry holds great importance for Western policymakers

and expects the US to adopt a more surgical approach towards the country this time. He says, policymakers should avoid taking any complex measures such as changing trade preferences. The political instability also prevents foreign high skilled and technical workers from entering the country. Further tightening of visa procedures threaten garment operations. The next few months are likely to be bleak for Myanmar as the country may fail to attract new investments. Its current projects may also face approval problems and the country may not bag new orders. n

APPAREL / LUXURY

Entry of new sellers

drives growth

of India’s luxury resale

market


Luxe brand hunters in India have never had it so good with brands like Jimmy Choos available at price of a Zara handbag, and Rs

25,000 worth sunglasses from Tiffany & Co can be had for Rs 8,000 from Instagram thrift stores. The luxury resale market is proving to be a boon for shoppers with limited budgets. The market has witnessed exponential growth globally and is expected to be worth $64 billion by 2024. In India, search for thrift stores on Instagram records 6.25 lakh posts and over 60 handles deal with thrifting.

APPAREL / LUXURY


DEMAND FOR AUTHENTIC LUXURY PRODUCTSAmongst the thrift stores that have come up

in India over the past two years are, stores specializing in authentic products from high-end brands. They usually source products directly from sellers or physical thrift stores. The products are authenticated, cleaned and photographed before being sold again.

USE, STYLE DETERMINE PRICESAshok says, the price of thrift products often

depends on their use, wear and tear and visible defects. Style is also important as a limited edition product often commands higher price.

Kohima-based Jungshi Imti has been involved in thrift business for over two years. His instagram handle @Chichi n Co sells luxury bags, shoes, T-shirts, and dresses from brands like Louis Vuitton, Marc Jacobs, MCM Worldwide, Kenzo, Givenchy, Guess and Balenciaga.

He authenticates the products with a certificate. In case, it is not available, he advises buyers to look the product code in the insides of the bags or shoes. This code can help trace the products’ manufacturing date and country of origin from the brands’ website. Brands like Louis Vuttion also provide buyers a date code which helps in authenticating the product.

Prominent amongst these stores is the pop-up by Chennai-based graphic designer Sruti Ashok called ‘The Relove closet, so far, the store has gained over 5,000 followers. Ashok sells high-end luxury brands such as Versace, Swarovski, Chanel, Roberto Cavalli, Tiffany, Chloe, YSL, etc priced between Rs 3,000 and Rs 5,000 on her instagram page and caters to women in mid-20s and 30s. A FAST CHANGING TREND

Knowledge also helps thrift sellers determine the authenticity of their products. For example, Riva Rokade, a student of styling and mass communication, scouts through heaps of clothes before making her final selection. The Mumbai-based stylist launched The Vintage Laundry in Feb 2020 but had to shut it for two months due to the lockdown. She visits her suppliers to curate the clothes. However, this was not possible during the lockdown. Even after easing of restrictions, she could sell only five clothes every week. Now, she sells around 30 pieces every week. Most of Rokade’s clothes are sold within two or three days. She mostly sells jumpsuits, flowing pants, sweatpants and baggy shirts. Hoping for fashion trends to change soon, Rokade is geared up to face the challenge. n

APPAREL / COVER STORY


During the financial year 2018-19, the Indian textiles and apparel industry contributed 2 per cent to India’s GDP and 12 per cent to its export earnings. The industry held a 5

per cent share of the global textile and apparel trade during the financial year.

However, since 2019, India’s rank has dropped to 5th position with the country experiencing negative 1 per cent CAGR in the past five calendar years.In 2021, future, India’s textiles and apparel exports are expected to touch US$ 82 billion growing at a CAGR of 12.06 per cent from FY18.

As per Comtrade figures, till 2017 India was the world’s second largest exporter of textiles and clothing after China.

Flexible labour laws and product innovations

to boost India’s apparel exports

Like other nations, India does not offer total garment package solutions to leading International brands and retailers



LARGE SCALE UNITS AND FLEXIBLE LABOR LAWS

One of the reasons for the decline in India’s apparel exports is the largely fragmented nature of the Indian clothing industry, and its low-scale, says Astute Consulting. As per their report, India’s archaic labor laws prevent factory owners from laying off workers during slack business period. The small size of factories also makes it difficult for owners to invest in technology and product up gradations.

Another challenge the industry faces is the lack of access to global markets. Currently, India does not have preferential trade agreements with other nations, preventing exporters from accessing key

markets. Also, like other nations, India does not offer total garment package solutions to leading International brands and retailers. Its textile mills ship fabrics to other garment conversion countries like Bangladesh, Vietnam, that have flexible labor laws and bigger manufacturing facilities.

To regain lost glory, India needs to introduce flexible labor laws besides encouraging entrepreneurs to set up large scale units employing 30,000 to 50,000 workers under one roof. This will boost productivity and reduce per unit cost of manufacturing. It will also help the country allocate higher investments in product development equipment.

SET UP VERTICALLY INTEGRATED FACILITIESIndia also needs to set up integrated vertical setups

ranging from fiber, yarn and fabrics to garments at a single location. Fabric mills here need to be either vertically integrated into garment manufacturing setup or backward integrated into fabric and yarn manufacturing. However, this requires huge capital investment.

The US and EU are the largest markets for Indian textiles and clothes. Both countries have free trade and preferential trade agreements with India’s competitors, negatively impacting its exports.

SIGN FTAS WITH EUIndian companies also face trade barriers unlike

other countries like Bangladesh, Vietnam, Sri Lanka and Pakistan who benefit with a 10 per cent discount

POINTERS

• India needs units employing 30,000 to 50,000 workers under one roof.

• Fabric mills need to be vertically integrated into garment manufacturing setup

• Indian companies need eco-friendly processing and finishing technologies for fabrics and the garment washing.

• Indian exporters also need to explore new markets like Columbia and Mexico,



on landed price of products due to GSP+ status with EU. Recently, even Vietnam and Korea have entered into FTAs with the EU to improve market access. Therefore, India needs to expedite an FTA with the Union. This will not only benefit its apparel, made-ups and textile industry but also neutralize some of the price disadvantages that it faces today.

ENCOURAGE NEW PRODUCT DEVELOPMENT India already has a vibrant domestic market

and abundant labor force. Its decentralised power looms/ hosiery and knitting sector forms the largest component in the textiles sector. The close linkage of textiles industry to agriculture makes it unique in comparison to other industries in the country. Now, Indian companies need to encourage their product development teams to make innovative products that also meet sustainability standards.

Companies need to set up manufacturing facilities equipped with latest state-of-art sampling machines. This will help them manufacture products in smaller batches, reducing their turnaround times



its fashion industry with domestic sales of about $7 billion.

Currently, ‘India’s apparel exports to Colombia are just 3 per cent of its global imports. This does not really reflect the strength of the sector. Hence, apparel exporters need to focus on Colombia’s fashion industry that accounts for 9.4 per cent of the country’s industrial GDP and employs about 600,000 people. Like Columbia, Indian apparel exporters also have huge opportunities in the Mexico market, opined Indian ambassador to Mexico, Mr. Manpreet Vohra at the ‘India-Mexico Synergies in Apparel and Textiles’, a virtual conference organised by Apparel Export Promotion Council (AEPC) and the Embassy of India in Mexico City,

Mr. Vohra said that the bilateral trade has grown 46 per cent to about $10 billion since 2014 and Mexico is now India’s largest trading partner in Latin America and the second largest in entire America after the USA and having overtaken Canada and Brazil.

In 2019, Mexico imported $381 million worth of textiles and clothing items from India. According to Vohra, there is much more room for growth borne as in 2019 Mexico imported over $10.7 billion worth of garments and textiles from all over the world. n

FOCUS ON SUSTAINABILITYCompanies also need to set up manufacturing

facilities equipped with latest state-of-art sampling machines. This will help them manufacture products in smaller batches, reducing their turnaround times. They need to use eco-friendly processing and finishing technologies both for fabrics and the garment washing. Their processes need to be re-engineered to save energy consumption, increase water recycling and improve effluent treatment. Also, they need to adopt new processes to use recycled raw materials, extracted from pre-and post-consumer wastes, like Polyester and Cotton.

EXPLORE NEW MARKETSIn Indian exporters also need to explore new

markets like Columbia and Mexico, opines AEPC. The council had recently organized ‘India-Colombia Synergies in Apparel and Textiles’, a virtual meeting platform to explore export opportunities in the South American nation.

At this seminar, Mr. Sanjiv Ranjan, Indian ambassador to Colombia, there is a huge potential for Indian apparel exporters in Colombia, particularly in

APPAREL / SPECIAL STORY


Announced by Hon’ble Finance Minister Smt Nirmala Sitharaman on February 01, 2021, the Union Budget 2021-22 was hailed by all sections of the Indian textile

and apparel industry as one of the most realistic budgets of modern India.

AEPC ORGANIZES WEBINAR TO PRESENT BUDGET HIGHLIGHTS

Apparel Export Promotion Council (AEPC) organized a webinar to highlight the implications of the Union Budget, 2021-22 for apparel industry, in collaboration with M/s Lakshmikumaran and Sridharan on February 05, 2021.

At the seminar Dr A Sakthivel, Chairman, AEPC appreciated the government’s allocation of Rs 10,683 crore for the production linked incentive scheme for MMF garments and technical textiles. He said, the scheme will promote the export of MMF garments besides helping Indian manufacturers attract more


With their plug-and-play facilities, the seven Mega Investment Textile Parks (MITRA) to be set up across India, will help create global export champions.

investments, create economies of scale and enhance exports.

Dr Sakthivel also appreciated the scheme to set up seven Mega Investment Textile Parks (MITRA) across India. These mega textile parks, with their plug-and-play facilities, will help create global export champions, he said.

APPAREL / SPECIAL STORY


The reduction in custom duty on nylon will promote MMF garments production, said Dr Sakthivel further adding, the allocation of Rs 15,700 crore for Micro, Small and Medium Enterprises (MSME) sector will strengthen the sector which is crucial for employment, manufacturing and exports.

Dr Sakthivel also lauded the allocation of Rs 1,624 crore for the shipping sector. He also announced a scheme to promote the flagging of merchant ships that will be launched by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs.

MAKING INDIAN MANUFACTURERS GLOBALLY COMPETITIVE

Dr LB Singhal, SG, AEPC explained that the PLI scheme is intended to make Indian manufacturers globally competitive, attract investment, create economies of scale and enhance exports. The scheme has been announced for 13 key sectors and the total support in the scheme is Rs. 1.97 lakh crore in next 5 years.

The budget also allocates Rs 13,000 for RODTEP scheme. Additionally AEPC has issued Export Performance Certificate (EPC) for the import of S.No. 288 (lining and inter-lining materials) and S.No. 311 (trimmings and embellishments etc.). Now, items permitted for import under S.No. 311 (trimmings and embellishments etc.) have been deleted. Accordingly these items will not be allowed to be imported without payment of duty. Items permitted under S.No. 288

(Lining & Interlining) will continue to be permitted under EPC.

According to condition 108 of Notification No 2/2021-Customs dated 01.02.2021, exporter of items under S. No. 257 require to submit a bond for each import consignment that imported articles will be exported within six months from the date of importation.

As per the proposed amendment in clause 114 of the finance bill, 2021, the export sale on payment of IGST is now restricted to a notified class of taxpayers or specified supplies of goods or services.

Further at the seminar, Mr Lakshmikumaran, Founder & Managing Partner of M/s Lakshmikumaran & Sridharan presented the highlights and proposed changes in GST, Customs and Direct Taxes along with his other team members Mr Bipin Verma - CEO & Executive Partner, Ms Nupur Maheshwari, Partner and Ms Jyoti Arora, Joint Partner. He also highlighted that innovation and creativity of the textile is amazing as this sector employs skilled and unskilled people.

Mr Bipin Verma (CEO & Executive Partner) highlighted the areas of impact in GST with focus on Input Tax Credit, Beneficial and Enforcement Provisions.

Ms Nupur Maheshwari (Partner) highlighted legislative and rate changes in customs with focus on New levy – AIDC, Timeline for completing investigation/inquiry, Timeline for conditional exemption, Common portal, Penal provisions, Amendments in IGCR Rules 2017, Change in effective rate and Omission of exemption benefit

Ms Jyoti Arora (Joint Partner) gave a presentation on direct taxes with focus on Income Tax Settlement Commission (ITSC), Dispute Resolution Committee (DRC), Board for Advance Ruling (BAR) and Faceless Proceedings before ITAT etc. n(The detailed presentations are available on AEPCs website: www.aepcindia.com in the section “Event Calendar>February 2021>AEPC Events”.)

POINTERS• The allocation of Rs 10,683 crore for

production linked incentive scheme will promote MMF garment exports from India

• The government aims to set up seven Mega Investment Textile Parks across India with Plug and Play facilities

• The budget also allocates Rs 13,000 for RODTEP scheme

• The government also announced a scheme to promote the flagging of merchant ships

The reduction in custom duty on nylon to 5 per cent will help the MMF industry become more competitive and boost exports

APPAREL / FOCUS COUNTRY


Mauritius: A growing economy with

robust industrial and tourism sectors


Economic OverviewFrom a low-income, agriculture-based economy, Mauritius has transformed into a diversified, upper middle-income economy with growing industrial, financial, and tourist sectors. The country currently depends on sugar, tourism, textiles and apparel, and financial services, but is expanding into fish processing, information and communications technology, education, and hospitality and property development. Mauritius has attracted more than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Mauritius continues to rank as one of the most business-friendly environments on the continent and passed a Business Facilitation Act to improve competitiveness and long-term growth prospects. A new National Economic Development Board was set up in 2017-2018 to spearhead efforts to promote exports and attract inward investment.

LocationSouthern Africa, island in the Indian Ocean, about 800 km (500 mi) east of Madagascar

ClimateTropical, modified by southeast trade winds; warm, dry winter (May to November); hot, wet, humid summer (November to May)

Age Structure0-14 years: 19.44% (male 137,010/female 131,113)15-24 years: 14.06% (male 98,480/female 95,472)25-54 years: 43.11% (male 297,527/female 297,158)55-64 years: 12.31% (male 80,952/female 88,785)65 years and over: 11.08% (male 63,230/female 89,638) (2020 est.)



Economic Indicators

Indicators Value

Real GDP (Purchasing Power Parity), 2019 est. $28.947 billion

GDP (official exchange rate), 2019 est. $14.004 billion

Real GDP(Per Capita), 2019 est. $22,870

GDP Growth (Annual %),2019 est. 3.0%

Annual rate of Inflation, 2019 est. 0.40%

Exchange Rate (2020 est.)- Mauritian rupees (MUR) per US dollar - 39.65

Industriesfood processing (largely sugar milling), textiles, clothing, mining, chemicals, metal products, transport equipment, nonelectrical machinery, tourism

Source: The World Factbook-CIA & The World Bank Note: est. - Estimated



Mauritius Apparel Trade

Mauritius RMG Import from World and India

2017 2018 2019 % Change 2019/2018

Mauritius RMG Import from World, (USD Mn.) 75.4 84.1 100.0 18.9

Mauritius RMG Import from India, (USD Mn.) 20.2 21.4 22.9 7.3

India's Share in RMG Mauritius's imports from

world, %26.8 25.4 22.9 -9.8

Source: UN Comtrade, 2021

● The above table shows that Mauritius RMG import from world were to the tune of USD 100 mn. in 2019 showing a

positive growth of 18.9% as compared to 2018 .RMG import from India has remained USD 22.9 mn. registering a

positive growth of 7.3%. as compared to 2018. India’s % share in Mauritius RMG import from world has remained

22.9%.


Top RMG Supplier to Mauritius

Top RMG Supplier to Mauritius (Values in USD mn.)

RankExporters 2019 % Share

World 100.0 100

1 China 32.2 32.2

2 India 22.9 22.9

3 United Kingdom 12.7 12.7

4 South Africa 5.4 5.4

5 Bangladesh 3.8 3.8

6 Viet Nam 3.7 3.7

7 Thailand 2.7 2.7

8 Indonesia 1.9 1.9

9 France 1.8 1.8

10 Cambodia 1.7 1.7


● The above table shows that China has remained a top supplier of RMG to Mauritius with a % share of 32.2% in 2019.

India is the 2nd largest supplier of RMG to Mauritius with a % share of 22.9 %. Bangladesh, Vietnam and Cambodia

have a % share of 3.8%, 3.7% and 1.7%.



Mauritius Top 10 RMG Import from World vs India’s share

Mauritius Top 10 RMG Import from World vs India’s share

S. No. Code

Product label

Mauritius imports

from world, In USD mn.

Mauritius imports

from India, In USD mn.

India’s Share in

%

2009 2019

RMG 100.0 22.9 22.9

Sum of Top 10 45.6 12.5 27.3

1 610429 Women's or girls' ensembles of textile materials 11.1 0.3 2.5

2 621149 Women's or girls' tracksuits and other garments, n.e.s. of textile materials 6.5 5.3 81.5

3 620690 Women's or girls' blouses, shirts and shirt-blouses of textile materials 4.4 2.4 55.3

4 620442 Women's or girls' dresses of cotton 4.3 1.7 40.5

5 610910 T-shirts, singlets and other vests of cotton 4.2 0.5 13.1

6 620449 Women's or girls' dresses of textile materials 3.5 1.4 39.0

7 620469 Women's or girls' trousers, bib and brace overalls, breeches and shorts of textile materials 3.3 0.3 9.4

8 620462 Women's or girls' trousers, bib and brace overalls, breeches and shorts of cotton 3.1 0.3 11.2

9 610990 T-shirts, singlets and other vests of textile materials 2.7 0.1 4.7

10 620349 Men's or boys' trousers, bib and brace overalls, breeches and shorts of textile materials 2.7 0.1 3.2


● The above table shows Mauritius top 10 RMG

products imported from world vis-à-vis from India

and India % share in those top 10 products. The top

10 products imported from world were to the tune of

USD 45.6 mn. in 2019 and import from India of these

top 10 products were to the tune of USD 12.5 mn.

India has a % share of 27.3% in Mauritius’s top 10

products import from world.

● The top products imported by Mauritius from world

includes T-shirts of cotton, Jerseys, pullovers of

cotton, Men’s trousers of cotton, T-shirts, singlets

and other vests of textile materials, women’s or

girl’s dresses of synthetic fibres and women’s or

girl’s blouses, shirts and shirt-blouses of man-made

fibres.


Mauritius Top 10 RMG Import from India

Mauritius Top 10 RMG Import from India

S. No. Code

Product label

Mauritius’s imports

from India, USD mn.

% Share in 2019

2019

RMG 22.9 100

Sum of Top 10 15.9 69.3

1 621149 Women's or girls' tracksuits and other garments, n.e.s. of textile materials 5.3 23.1

2 620690 Women's or girls' blouses, shirts and shirt-blouses of textile materials 2.4 10.5

3 621142 Women's or girls' tracksuits and other garments, n.e.s. of cotton 2.0 8.5

4 620442 Women's or girls' dresses of cotton 1.7 7.5

5 620449 Women's or girls' dresses of textile materials 1.4 5.9

6 620630 Women's or girls' blouses, shirts and shirt-blouses of cotton 1.0 4.1

7 621139 Men's or boys' tracksuits and other garments, n.e.s. of textile materials 0.7 3.0

8 610910 T-shirts, singlets and other vests of cotton 0.5 2.4

9 621143 Women's or girls' tracksuits and other garments, n.e.s. of man-made fibres 0.5 2.4

10 621490 Shawls, scarves, mufflers, mantillas, veils and similar articles of textile materials 0.4 1.8


● The above table shows Mauritius’s top 10 RMG

products imported from India. Mauritius top 10

products imported from India were to the tune of

USD 15.9 mn with a % share of 69.3% in Mauritius

total RMG import from India.

● The top products imported by Mauritius from India

includes Women’s or girls’ tracksuits and other

garments, n.e.s. of textile materials, Women’s or

girls’ tracksuits and other garments, n.e.s. of cotton,

Women’s or girls’ dresses of cotton and Women’s or

girls’ tracksuits and other garments, n.e.s. of man-

made fibres.

Tariff

● India has zero duty access in Mauritius market for

apparel products. n


APPAREL / INSIGHT

Pandemic brings comfort in focus as demand for

casualwear rises

Global apparel industry reports and experts alike have highlighted the ongoing pandemic has given a huge impetus to comfort wear with sale

of leggings, track pants, tees et al clocking in huge growth since March 2020. And even after restrictions have eased, loungewear sales have not slowed down, say retailers. As Sanjay Jain, CEO, PDS Multinational Fashions told Mint, demand has shifted from formal to casual wear. “Fashion designers are predicting a move from tighter, body-fitting fashion to more loose apparel. You and I are going to see more baggies.”

Numbers too reveal, loungewear sales continue to remain high. For PDS for example, in 2019 the division between casual and formal wear was around 75:25 it changed to 95:5 in post-Covid. PDS offers product development, sourcing, design and manufacturing services to top global brands and retailers like Superdry, Primark and Next, and supermarket chains like Walmart, Woolworths and Sainsbury’s. In 2019-20 alone PDS did business worth Rs 6,000 crore. As per Jain, formal wears space has been taken over by an increase in demand for athleisure, denim and loungewear.

CASUAL WEAR TREND CATCHES ON Even though casual wear was always popular

however, the lockdown has given it added boost. The trend has caught on with brands and retailers looking at it as a huge opportunity. PDS expects demand for athleisure and denim to dominate this year. And Jain says the trend has shifted from causal trousers to denim. Before Covid, the split was 70 per cent (causal trousers) and 30 per cent (denim), but post-COVID it has reversed. T-shirt dresses and polos are also seeing good demand in Europe and North America. Sale of casual and formals shirts are down 30-40 per cent.


APPAREL / INSIGHT

Similarly, footwear retailer Bata India is looking at casual apparel category as consumer focus shifts to athleisure. As Bata Shoe Organisation’s global CEO Sandeep Kataria says the company was testing its training and fitness apparel under the Power brand.

In fact, retailers are sceptical about formal clothing sales bouncing back anytime soon. Jain told Mint “The revival of formal wear is based on the assumption that the vaccine will have an impact, Covid will go away and you and I will go back to office. The trends are encouraging, but a structural shift has taken place. There is a realization that work from home is doable.”

On similar lines, Kataria feels post-Covid the culture of work from home will continue. Therefore, comfort wear will have a lasting impact. He says, Bata consumers are looking for casual footwear with comfort and casualisation driving trends.

GROWING AWARENESS TO BOOST SUSTAINABILITY DEMAND

Even though retailers do not expect formals wear sales to recover, any time soon, they are eyeing next spring/summer season and working on collections accordingly.

One big thrust during the pandemic is growing awareness about sustainability among consumers. Stakeholders in the apparel industry are now focusing on eco-friendly methods as the momentum picks up. Bata for example has factories with zero-effluent. Besides, some of its footwear brands such as Power use recycled tyres in its shoes.

While awareness about sustainability is growing costs are a concern for consumers, feels Jain. Sustainable raw materials are definitely more expensive. However, with time consumers seeking shopping choices in sustainable products will grow even as their wardrobes get smaller. n


APPAREL / MARKET

Post-Brexit UK-Europe trade to get more costly with extra duties, taxes

O n January 31, 2020, when Brexit came into force it was expected to ease trade relations between the Europe and the UK. But, one month since the conclusion

of the trade deal, things are far from smooth for luxury brands in both regions. As a Vogue Business reports shows, 20 of 57 luxury brands that operate in both UK and Europe face delays in product deliveries. Additionally, customers are being

burdened with unexpected duties and taxes on their products. Brands are being taxed for product returns, affecting their profit margins. Luxury firms like the London department store Fortnum & Mason and Kate Spade New York, are being forced to suspend sales to Europe, until things work out.

COURIER CHARGES, IMPORT DUTIES INCREASEConsultants and industry experts expect the


APPAREL /MARKET

situation to improve soon. However, they believe, Brexit has made trade between the two regions more costly. Simon Cotton, CEO, Jonhstons of Elgin says, it has increased courier charges between the two regions with firms charging over £4.50 for a parcel delivery between the UK and EU alongwith potential additional administrative costs. UK companies sourcing their products from outside Europe have to pay a duty on import of products besides an extra charge for exporting them. These products can achieve a tariff-free status only if they fulfill the complicated rules of origin, adds Aruni Mukherjee, Director-Indirect Tax, KPMG UK.

Troubled by this, retailers like John Lewis have temporarily halted exports to Europe while others have declined to pay the extra duties or taxes. Amazon has withdrawn its products from the Northern Ireland market though retailers like Robert Ettinger, CEO, of namesake brand has received several inquiries from brands for making products in the UK.

PRODUCT RETURNS AND TRADE SHOWSBesides being burdened with extra duties and

taxes, retailers also face additional charges on product returns by customers. Post Brexit, a product returned by a European customer to a UK brand and vice versa attracts additional duties and taxes even the brand has already paid a duty while shipping the product. UK government advisors have recommended splitting the supply chain into two parts and handling shipments and returns separately with the UK and EU. However, such a solution is not feasible for smaller businesses like the womenswear brand Cefinn.

According to Adam Mansell, CEO, UK Fashion & Textile Association (UKFT), Brexit may also lead to an increase in freight levels once stores in the UK reopen, and brands move through stock imported before Christmas. Though European brands have not increased the average price of goods in their British online stores, their costs are eventually likely to increase as Mastercard plans to increase its fees for customers using a UK card to buy a product from an EU retailer, says data from BenchMarque by Deloitte.

The UK fashion industry and retail sector is yet to experience the full effects of post Brexit laws like the government’s abolition of its VAT (Value-Added Tax) retail export scheme. It may face further challenges post pandemic in the form of extra costs that retailers may have to bear for showcasing their products at European trade shows. The future for retailers certainly seems challenging. n


APPAREL / RETAIL


Retail owners risk stable revenues as they venture into

volatile retail business

The acquisition of apparel retailer Aeropostale in 2016 led to a new trend of landlords acquiring tenants. In the past several months, the Simon

Property Group has acquired a slew of retailers like the Lucky Brand, acquired in partnership with Authentic Brands. Brookfield Property Group took over the brand Forever 21 earlier this year..

MONEY, THE MAIN DRIVER FOR PROPERTY OWNERS

As per a Retail Dive report, there are many reasons behind landlords acquiring tenants these

days. One of the most fundamental amongst these is to make money, says David Simon, CEO, Simon Property Group, which along with Brookfield bought JC Penney in November last year. The acquisition helped the group boost JC Penney’s pre-COVID sales to $9 billion. Another reason, property owners look to own their tenants is to preserve rent—the most important revenue source for a mall REIT. It also help them maintain a broader tenant base, says Michael Brown, Partner-Consumer and Retail Practice, Kearney.Bradley Tisdahl, Founder and CEO, Tenant Risk Assessment adds acquiring a failing retailer also

APPAREL / RETAIL


24 hours of each other. Property owners like Simon and Brookefield are also under a lot of stress, says a report from S&P Global Market Intelligence.

Brookfield Property Partners aims to solve this problem by going private. This would offer them more flexibility to operate their portfolio besides enabling it to realize asset value, adds Nick Goodman, Chief Financial Officer, Brookfield Asset Management.

Besides their incomes being untaxed, the rules for mall REITs are designed for passive investments, says Nick Egelanian, President, SiteWorks. This boosts their partnership with retailers, adds Matthew Katz, Managing Partner, SSA & Company, which advises companies on strategic execution. However, this deviates from the REIT’s original function of owning and managing properties. REITs venture into this business to ensure a steady flow of their revenues. However, by doing this, they also put their stable rents at risk. n

offers accounting advantage for a REIT. It allows the mall operator to control the retailer’s net operating losses (NOLs).

EMERGING SCENARIOS FOR MALL OPERATORS

However, for mall operators, owning their retailers can lead to two scenarios. It could either lead them to offer favorable lease terms to own retailers or encourage them to shut retailer’s stores in rival malls. This could lead to rival mall’s elimination from the market, which may encourage the surviving mall to raise prices.

Earlier, malls used to be anchored by department stores. However, now they are being replaced by specialty players, off-price stores, big boxers and Amazon. Apparel stores like Gap and department stores like Macy’s are opening shops at strip malls and open-air centers. This has led to two mall REITs, CBL and Preit filing for bankruptcy withom

APPAREL / RETAIL

BURBERRY’S RETAIL SALES FALL BY 9%

British luxury brand Burberry’s comparable retail sales fell 9 per cent at constant exchange rates for the 13 weeks ending December. However, analysts had been expecting a 7 per cent decline. The steep decline during the pivotal holiday quarter shows how the pandemic continued to weigh on luxury fashion brands. The pandemic has also widened the gap between the strongest players like LVMH and Hermès, whose fashion sales returned to growth by the end of last summer, and more novel propositions like Burberry, which overhauled its designs and weeded out diffusion lines in a bid to move upmarket under designer Riccardo Tisci and chief executive Marco Gobbetti.

Burberry pointed at a silver lining with full-price sales that increased by more than 10 per cent in its key leather and outerwear categories. The brand blamed low tourist traffic at its off-price outlets and an effort to limit markdowns in its mainline stores for the overall sales decline. n

MANGO TO FORAY INTO HOMEWARE MARKET

Fashion retailer Mango will enter homeware, home linen and home decoration market. After the pandemic shockwave, Mango managed to adapt

and respond to new trends, like the boom in e-tail and high demand for casual outfits, and it now intends to capitalise in this new segment.

In a press release, Mango stated the brand has created a new line in order to extend its presence to the homes of its customers, and beyond their wardrobes. This will allow the company to enlarge its product range and offer customers an improved service, by enabling them to purchase complementary products. The group is keen to tap the current popularity of home decoration products, prompted by the lockdown, remote working and generally by the restrictions to people’s movements introduced in recent months, which mean potential customers are spending an more time at home.

Mango’s new homeware range will be available from Q2 2021. To begin with, there will be a capsule collection of home linen products, featuring bed and bathroom linen and a series of textile products for the kitchen. The range will gradually expand, extending to other categories, such as tableware. Approximately 80 per cent of all products will be produced locally. The collection will be available in 20 European countries, and its articles can be viewed on Mango’s e-shop and at the label’s physical stores, on the tablets used by shop assistants. n

AMERICAN EAGLE TO SHUT 250 MALL-BASED STORES

US-based leading apparel retailer American Eagle is planning to shut around 200 to 250 stores, mostly mall-based locations. The company currently has around 880 stores. These store closures will take place in next 2 to 3 years. At the same time, the retailer plans to grow the number of Aerie stores by 50, to reach about 400 by the end of 2021. The target is to have 500 to 600 Aerie locations by 2023.

The company is expecting its fourth-quarter revenue to decrease in the low-single digits –driven by a drop in bricks-and-mortar sales due to weak mall traffic during the pandemic. It expects


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momentum to continue online, with digital sales at all of its brands growing in double digits. Aerie is forecasted to see a high 20 per cent revenue growth in fourth-quarter, while its namesake American Eagle is forecasted to see sales drop in low double digits. Its long-term financial target is to grow Aerie business to $2 billion, while improving profits in namesake banner. The rapid growth of Aerie, which sells everything from bras and underwear to swimsuits and sweatpants, is emerging as a strong competition to L Brands’ Victoria’s Secret business.

Sharing long-term financial outlook, the company informed it targets revenue of approximately $5.5 billion and operating income of $550 million in fiscal 2023, with the operating margin expanding to 10 per cent. n

H&M TEAMS UP WITH LEE FOR SUSTAINABLE KIDS WEAR

Encouraged by the growing demand for

loungewear and sustainable fashion H&M has linked with Lee jeans for kids wear and a loungewear deal with Yrsa Daley-Ward. The Lee kids’ collection is a holistic collaboration with advances at every stage of design and production, with every single material made more sustainable. For the first time, it will also share Life Cycle Assessment (LCA) data on hm.com indicating the water, C02 and energy impact of each denim garment from raw materials to end of use.

The collection features, jeans, jersey pieces and accessories, with a 80s and 90s throwback feel. It includes relaxed-cut jeans, as well as a workwear influence in dungarees, dungaree dresses and jeans with cargo pockets. There’s a kids’ take on Lee’s classic Rider jacket, cut with a slightly cocooning shape. Jersey pieces play with the heritage of Lee’s world famous logo with relaxed tees and hoodies with pops of purple and cobalt blue. Accessories include knit beanies and a mini sports bag.

Meanwhile, the Yrsa Daley-Ward collection uses quotes from her powerful poetry. Key pieces

include the longline Bermuda shorts with co-ord slogan sweatshirt, oversized T-shirts and seamless crop tops, and a drop-shoulder hoodie, all made with materials such as organic cotton and recycled polyamide. n

LEVI’S TO RAMP UP WHOLESALE STRATEGY ACROSS EUROPE

Despite having announcing larger focus on direct-to-consumer business, Levi’s is simultaneously ramping its wholesale initiatives in the US and throughout Europe in 2021. The denim giant’s past reports indicate that the US wholesale business accounts for 30 per cent revenue, and will always be important to the company. Executives mapped out a wholesale strategy with a three-pronged approach, mainly tackling the whitespace, owning the brand expression and taking charge of the customer relationship.

By zeroing in on these areas, the brand hopes to control how they show up in the marketplace, differentiate its assortment, deliver a head-to-toe look, and find new distribution opportunities and more.

New avenues of distribution are a top priority for brands this year, as so many spent 2020 treading water as a result of the pandemic. In October, the company announced plans to expand into 500 Target stores throughout 2021. It also attributed the success of its value line, Denizen, to Asian wholesale partners. Customers such as Amazon Japan and value store Mac House, for example, helped the collection compete with Uniqlo, its biggest rival in the region. In 2021, Levi’s will continue to strengthen these partnerships.

But it’s not just giant wholesalers that are targets for strategic partnerships. Levi’s is also working with smaller customers, and ensuring that the proper technology is in place for smooth service.


APPAREL / RETAIL

With all of these strategies in place, the brand set an aggressive target of 20 per cent of total revenue in the U.S. to come from its value business. Last year, Levi’s made several key updates to its product marketing within Walmart stores, and saw an immediate uptick in sales. n

BRAND RESET AND DIGITAL MARKETING HELP SUPERDRY PROGRESS DESPITE PANDEMIC EFFECTS

Fashion retailer Superdry said, the brand is progressing despite the impact of the pandemic on its first half performance and the build-up to Christmas, due to its brand reset and influencer-led digital marketing strategy.

In the 26-week period, revenue declined 23.4 per cent to £282.7 million which Superdry said reflected Covid-19 effects, with 23 per cent owned store trading days lost due to lockdown restrictions and the continued impact of social distancing on footfall even when open.

However, the group’s ecommerce performance was up 49.8 per cent year on year and partially offset lost store sales, which were down 44.8 per cent, as consumers moved online. The business made an underlying loss before tax of £10.6m, widened from £2.3m in the equivalent 2019 period, driven by the trading disruption.

Despite the difficult financial performance, Superdry stated that the momentum of its brand reset continued, with its Autumn/Winter 20 (AW20) range fully launched across all channels, with key marketing campaigns said to be driving record levels of engagement.

Sustainability is also increasingly embedded in the brand with 38 per cent of A/W20 revenues from organic cotton, recyclable and low-impact material product, and all of AW20 padded outerwear jackets using recycled materials. n

DEBENHAMS SHUTS ALL STORES IN UK

UK department store chain Debenhams is shutting all outlets, administrators for the collapsed group informed, with the loss of around 12,000 jobs. Debenhams, which has long struggled with fierce online competition, will see its brand live on however after British online fashion group Boohoo bought the group’s intellectual property assets.

Debenhams collapsed last month, having struggled to adapt from a bricks-and-mortar business long before the coronavirus pandemic forced shoppers online. Stores will reopen following the lifting of the UK lockdown to liquidate stock, administrators FRP Advisory, brought in to salvage parts of the business. Once Debenhams stores are able to reopen and the stock liquidation can continue in stores, the website will be operated by Boohoo. The closing down sale will continue in stores for several weeks until the stock liquidation is completed and the value of this stock will be retained for creditors. Regrettably, all the UK stores will then be permanently closed, the statement added.

Debenhams, whose history dates back to the late eighteenth century, had hoped to sell some of its 124 stores, whose staff has been paid by the British government’s furlough scheme during the pandemic. n

FRASERS’ STAKE IN HUGO BOSS INCREASES TO 15%


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Mike Ashley-led Frasers has increased stake in German luxury fashion house Hugo Boss to 15.2 per cent through stocks and derivatives, part of Ashley’s on-going drive to take the British sportswear retailer upmarket.

Frasers, is raising stake for the second time increasing it to 10.1 per cent in late June after disclosing an initial 5.1 per cent holding earlier that month. The company said it now held 3.6 million shares of common stock, representing 5.1 per cent of Hugo Boss’s total share capital. It also has 3.4 million shares via contracts for difference and 3.7 million shares via the sale of put options, which together represent 10.1 per cent of the Frankfurt-listed company’s share capital.

Frasers said its maximum aggregate exposure relating to stake change was about €275 million after taking into account the premium it will receive under the put options. In mid-2020 the number was €204 million. This investment reflects Frasers Group’s growing relationship with Hugo Boss and belief in Hugo Boss’s long-term future. Frasers Group intends to be a supportive stakeholder and create value in the interests of both Frasers Group’s and Hugo Boss’ shareholders. n

BESTSELLER LAUNCHES NEW MULTI-BRAND PLATFORM

Bestseller has launched a new multi-brand platform The Founded, which will take over from its existing Bestseller.com webstore. Launched by the UK-based Braveheart web design team, the innovative multi-brand platform will be a treasure trove of beloved Bestseller brands, trending pieces and relevant product creations.

With a fresh aesthetic, the company said this digital destination will, as Bestseller.com steps back,

start a new journey with a focus on its community by delivering considered features, personalized content and inspiring product recommendations.

All current Bestseller.com customers looking for the firm’s products online will be redirected from that website to Thefounded.com. And the company said it has great ambitions on behalf of Thefounded.com but also for Bestseller.com. The firm’s namesake website will eventually re-emerge as a new and more engaging corporate website for Bestseller, replacing the current about.bestseller.com.

That means telling more captivating stories about the company, its ever-increasing work within sustainability, its many new digital projects and – naturally – also the vast career opportunities the company offers both in Denmark and abroad. n

VF CORP’S Q3 REVENUE DROPS BY 6 PER CENT

VF Corp released Q3 results that ended December

2020 of fiscal 2021 and raises full year fiscal 2021 outlook. The company’s revenue from continuing operations decreased 6 per cent to $ 3.0 billion, while active segment revenue decreased 9 per cent including a 6 per cent fall in Vans brand revenue.

Outdoor segment’s revenue decrease 5 per cent, which included flat revenue in The North Face brand. The work segment revenue increased 8 per cent including a 9 per cent rise in Dickies brand revenue.

As far as region-wise revenue is concerned, international revenue was flat, while Europe revenue increased 1 per cent. The Greater China revenue rose 18 per cent, which included a rise of 22 per cent in Mainland China. Its full year fiscal 2021 revenue is now expected to be in the range of $9.1 billion to $9.2 billion, reflecting a decrease of 12 to 13 per cent on an adjusted basis. n


APPAREL / SUPPLY CHAIN


Deeper ties with suppliers to make industry more agile

Anew study by the World Federation of the Sporting Goods Industry and McKinsey & Company highlights supply chains as one of the main challenges for the

sporting goods industry in 2021. Titled, ‘Sporting Goods 2021 – The Next Normal for an Industry in Flux’, the study says, for the first time since the financial crisis, the sporting goods industry’s growth declined 7 per cent to $348 billion. Most brands, retailers and manufacturers reported losses in 2020 despite a rebound in business after the 1st and 2nd COVID-19 lockdowns.

POSITIVE OUTLOOK FOR THE INDUSTRYThe report predicts a positive outlook for

sporting goods industry over the next 12 months

despite uncertainties due to second COVID wave and slow vaccination process. Sporting events like the Olympic and Paralympic Games and the UEFA European Football Championships are likely to make a comeback along with other home, outdoor and digital activities. Over 60 per cent sporting goods stakeholders are optimistic the current year will be better than 2020. They hope to build sturdier supply chain partnerships and explore local alternatives.

NEED FOR A NEW BUSINESS MODELThe report states, e-commerce model

progressed as much as four years in the first month of the pandemic. E-commerce companies were more agile and had regular product runs

APPAREL / SUPPLY CHAIN


closely associated with demand. The lead times of Asian suppliers and lead times of big sporting goods companies reduced to 30 days. The industry also explored near-shoring and re-shoring options to cut lead time and shipping insecurities caused by trade rule worries. Around 73 per cent sporting goods leaders are now engrossed in building closer relations with suppliers. Around 60 per cent expect to strengthen their supply chains over approaching period.

To benefit from these shifts in supply chain logistics and capabilities, industry leaders need to adopt a new business model that speeds up identification, production schedules, and supplier contracts. Also, companies need to focus on deeper ties with suppliers to make operations more agile and responsible.

TRENDS FOR 2021The report also identifies the trends that will

dominate sporting goods industry in 2021:Athleisure: The pandemic has blurred the line

between home and office. Hence, there is rising acceptance of athleisure in formal environment. Over 75 per cent expect the athleisure market will grow, and 33 per cent attribute its growing popularity to COVID-19.

Sustainability: COVID-19 has also accelerated demand for sustainable products. Around 67

per cent consumers emphasize on sustainable materials while buying clothes. From mid-2017 to mid-2020, the number of net new ‘sustainable’ SKUs introduced in the online market grew 58 per cent per annum.

Digital fitness: Driven by social distancing and stay-at-home requirements, digital fitness gained popularity last year. Though not a complete for traditional sports and exercise, this trend is likely to culminate in a hybrid model including free and paid apps, livestream and (non-)connected equipment.

Online shopping: Online shopping for sporting goods increased thrice as much from 2019 to H1 2020. Experts expect this trend to stabilize at around 25 per cent in 2021.

Shift in marketing: Cancelling or postponement of sports events encouraged sports marketing to shift from physical assets to influencers on social media channels. Around 43 per cent respondents do not expect sporting goods marketing to be as closely linked with major sporting events in future.

New retail experiences: Lockdown measures have accelerated the crisis for brick and mortar stores. Around 45 per cent respondents expect companies to set fewer stores in the current year. They also expect stores to offer new facilities and make the shopping experience more memorable. n

APPAREL / SUSTAINABILITY


Found in more than half of all textiles, polyester production is likely to account for 85 per cent of total global fiber production by 2030, says a report titled

‘Fossil Fashion: The Hidden Reliance of Fashion on Fossil Fuels’, published by the Changing Markets Foundation, the report charts out growing polyester use in the last 20 years. The report also focuses on the growing carbon footprint of polyester production across the world. While this footprint was equivalent to 700 million tonne of CO2 in 2015, it is expected to nearly double by 2030.

One of the main reasons for the growing footprint is rise in production of plastics, from which polyester is made. Growing polyester production also results in an explosion of cheap and low-quality clothes causing a huge waste crisis, says the report. People today buy 60 per cent more clothes than they did 15 years ago, but do not wear them for half as long. This may result in ballooning of fashion production to 102 million tonne by 2030, it adds..

FAST FASHION BIGGEST GENERATOR OF INDUSTRY WASTE

Urska Trunk, Campaign Manager, Changing Markets Foundation, compares fast fashion to fossil fashion. According to her, brands’ addiction to cheap clothes made with synthetic fibers results in 87 per cent waste of clothing materials. Synthetic clothes also release tiny, non-biodegradable microfibers during washing and disposal.

Found everywhere from the Artic Ocean to food chains and even tap water, these microfibers are known to damage human lung development besides being harmful for sea creatures. Laura Díaz Sánchez, Campaigner at the Plastic Soup Foundation, also warns of the devastating effects of these microfibers on human health.

Synthetic free fashion to help industry become more

sustainable

APPAREL / SUSTAINABILITY

AN OPPORTUNITY TO LEAD CHANGETime and again, the fashion industry has made

several promises and launched many initiatives to control this microfiber pollution, but failed to reverse its impact on the environment. Now, the European Commission has the opportunity to lead this change. Besides slowing down the consumption rate of clothes across Europe, the commission can ensure that textile industry invests in fiber-to-fiber recycling technologies.

The Commission can also ensure that only those brands benefit from the COVID Recovery Package funds who adopt sustainability practices. Urska Trunk advises the commission to propose an all-encompassing textile strategy that makes fashion independent of synthetic fibers and takes it on a sustainable route. In this way, the commission can effectively address the issue that is threatening our lives. n


APPAREL / LABOUR LAWS


Need for new laws to uphold human rights in fashion supply chain

APPAREL / LABOUR LAWS


REBUILDING BUSINESS ON MUTUAL COOPERATION

Any business needs to be built on mutual respect, shared goals and cooperation. Currently, the scales are tipped in favor of Western buyers, often affecting manufacturers. However, even buyers are not spared often leaving suppliers out of pocket creates disruption and uncertainty in the supply chains.

It’s high time the industry tackles these issues once again highlighted by the COVID-19 pandemic. Brands cannot be trusted to protect the workers in their supply chains through voluntary codes of conduct.

Though many of them are known to care for each member of their supply chain, there are also others who do not care, as is evident from some of the glaring examples during the COVID-19 pandemic. Therefore, the industry needs new laws to regulate their supply chains and hold brands accountable for respecting human rights in their supply chain. n

Recent deals like online fashion brand Boohoo purchasing UK retailer Debenhams for £55 million and Asos buying Arcadia brands for £295

million are keeping the survival hopes alive for brands and retailers. However, their move to online operations is leading to store closures across the globe, causing great concern to apparel suppliers in Bangladesh. Hitting major Bangladeshi RMG suppliers, many apparel stores in the West recently went bankrupt. Their bankruptcy has panicked RMG makers in Bangladeshi who are usually the last ones to receive owned money whenever a store goes bankrupt, says a Textile Today report.

Recent spate of Western retail bankruptcies has left many suppliers with undue payments worth millions of dollars. These suppliers are usually paid for their orders after shipment delivery. Though many of may get some percentage of payments, the amount will be much lesser and fail to cover even the cost of order fulfillment.

REGULATING SUPPLIERS’ PAYMENTS A reason for payment

discrepancy is the lack of a proper regulatory system in the West. Western retailers are often allowed to purchase bankrupt businesses without thinking of their liabilities, and debts are written off. Administrators are also paid their salaries and rents while suppliers’ payments are ignored. As a solution, some experts propose introducing new laws to regulate supplier payments and betters ways of doing business. They also propose to set up a fund where brands would pay for their business with Asian garment factories. As per the report, this fund could be used to pay wages to suppliers in case of a brand’s insolvency. Also, suppliers need to be involved in the purchase of a bankrupt business. This ensures when new owners take on a business, they also take their debt.


The global T-shirt market which had maintained positive growth trajectory for two years since 2016 fell for the first time in 2019 by -3.5 per cent and

reached $88.5 billion, reveals a IndeBox study

‘World - T-Shirts - Market Analysis, Forecast, Size, Trends and Insights’. The study indicates overall, consumption saw a relatively flat trend. “The most prominent rate of growth was recorded in 2018 with an increase of 5.2 per cent against the previous

APPAREL / SECTOR FOCUS

Global T-shirts market to grow at 11% CAGR over the

next decade: Study


year.” In this year consumption reached its peak level of $91.7 bilion, and then dipped in 2019.

CHINA LEADS CONSUMPTION; INDIA RANKS THIRD

Based on volume, the countries with the highest T-shirt consumption in 2019 were: China (4.4 billion units), the US (2.9 billion units) and India (1.8 billion units). The top three account for 36 per cent of global T-shirt consumption. Japan, Pakistan, Indonesia, the UK, Nigeria, Bangladesh, Germany, Mexico, Ethiopia and Turkey followed them, together accounting for 22 per cent. In fact, based on value, China led the pack with $12.9 billion, followed by the US ($6 billion) and India raked third. However, the countries with the highest levels of T-shirt per capita consumption in 2019 were the UK (9 units per person), the US (9 units per person) and Germany (6 units per person).

TRENDS CHANGE AS PER REGIONThe study clearly indicates in the apparel

daily use category, T-shirts is one of the main goods. Sports and outdoor activity also generates demand. Consumption pattern changes as per fashion trends and social life.

In the US, T-shirt market is driven by fitness

trend. The need for athletic comfort becomes an important factor in the buying process. Also, with the pandemic, the ongoing trend of using activewear as everyday attire will continue and T-shirts that feature a blend of fashion and functionality will sell well. This is the reason why, top sportswear brands continue to launch new and appealing products.

Similarly in the EU market there are some clear trends. New variations and styles, and eco-fashion are being introduced. T-shirt consumption across Europe is expected to grow due to the rising fashion consciousness about T-shirt, and increasing purchasing power of the young population.

Meanwhile the market in Asia is expected to remain strong with an increase in the number of consumers. Lifestyle changes, higher disposable income and demand for trendy fashion is giving a huge boost to Asia’s T-shirt market. Another major growth booster is rapid urbanization followed by rising popularity of Western lifestyles. Also, Asia happens to be a global centre for T-shirt production, thus easy availability of the product.

MARKET TO REACH 29 BILLION UNITS BY 2030Much like all other sectors, COVID-19 impacted

the global T-shirts market with production facing headwinds due to lockdowns. And when China started easing and opening production units there were order cancellations which resulted in a stockpile of merchandise. This may have led to overstocking of warehouses, putting pressure on prices. Therefore, when demand grows back, recovery of production may be delayed until the stocks are sold, putting pressure on T-shirts category as a whole.

As per IndexBox estimates, in 2020, global consumption of T-shirts declined somewhat against 2019. In the medium term, as the global economy recovers market is expected to grow gradually, driven by rising population, recovering incomes, and the replacement of outworn ones, together with the consumer intention to get something new after a period of limitations. Overall, market will grow over the next decade, at an estimated CAGR of +1.1 per cent from 2019 to 2030. With this the volume of T-shirts market will be around 29 billion units by 2030. n

APPAREL / SECTOR FOCUS


COVID-19 has reemphasized the importance of quality, especially while buying FMCG products. Earlier, Indian consumers let discounts determine

most of their purchase decisions. However, now

they are looking for value-added products, says a report by Bengaluru-based research firm RedSeer Consulting. As per Business Insider report, India’s overall e-commerce transaction value fell from April to June 2020, peak months of lockdown.

APPAREL / E-COMMERCE

Moving away from Discounts, Online Shoppers Focus on Safety and quality


However, it soon picked up as people avoided venturing out of homes and preferred buying their essentials online. RedSeer Consulting expects this trend to continue in 2021, advancing the growth of the online shopping in India, and compelling brands to focus on their online operations, says Mrigank Gutgutia, Director..

Gutgutia categorizes Indian online shoppers into two types. One, who buy their usual products irrespective of large discounts being offered online, and other who focus more on the quality of products. Gutgutia says, this phenomenon is common across all tiers of cities.

SAFETY, QUALITY DRIVE SMALLER CITIES TO ONLINE SHOPPING

Consumers in Tier II and III are opting for online shopping because of the safe shopping experience it offers and guarantees on product quality. Discounts are one of the last reasons for shopping online in these cities, adds Gutgutia. Essentials were one of the most sought after categories during the pandemic. The category saw the highest average order value growth last year as more

people in Tier II and III chose value over price, says RedSeer Consulting. This is pushing more Flipkart’s consumers to move away from being trial only to long-term consumers. The e-tailer aims to focus more on subscription only program in 2021.

ORGANICS GAIN POPULARITYConsumers are also moving away from

aggregator e-commerce portals to Direct to Consumer brands as witnessed by the growth in revenue of brands like boAt, MamaEarth last year. As Mangesh Panditrao, Co-Founder, Shoptimize, a startup which helps businesses come online, says, COVID-19 has brought the focus back on quality and human wellness. It has reduced the importance of product price by increasing the popularity of organic food and wellness products, locally sourced produce, sustainably farmed goods, and vegan/cruelty-free products. The company’s clients have seen a 40 per cent increase in AOV (Average Order Value) this fiscal compared to last year.

Gutgutia believes this trend of online spending won’t change soon as more people plan to increase their spending on online shopping in 2021 too. n

APPAREL / E-COMMERCE

APPAREL / TRENDS

Fashion to get more digital in

2021


APPAREL / TRENDS

Even in an ultra-tough market, the digital world is helping fashion sector connect with customers, says Mark Sinnock, Chief Strategy Officer, Havas Group.

Brands are introducing consumer engagement strategies to attract buyers to shop with them. They are also encouraging industry peers to work with Black-owned business. As a report by Vogue Business notes, they recently passed the 15 per cent Pledge to encourage US retailers to increase their percentage of Black partners.

Consumers too are looking for brands with value, adds Sinnock. Though a positive sign, brands should abstain from using this as marketing gimmick and thread carefully, he advises. Social media offers such brands a platform to voice their opinions with tools such as Tiktok, making them a part of ongoing dialogue with consumers, adds Brian Mandler, Co-Founder, The Network Effect, a digital agency focused on short-form content. Fashion marketers can also benefit from short-form video applications that help engage younger audiences.

RISE IN INTERACTIVE MARKETING TRENDSAs per fashion marketers, future is about exploring

interactive marketing opportunities. For instance, in September last year, Burberry partnered Twitch to enable viewers of Spring/Summer 2021 show to interact in chat rooms. Prada also hosted a virtual show to encourage its audience participation. Its focus on China also paid off as the brand staged screenings of virtual show in Shanghai, besides live streaming on its Weibo and Douyin accounts.

Another trend luxury brands are exploring is gaming. Balenciaga launched its A/W ’21 collection last December as a video game. Titled Afterworld: The Age of Tomorrow, the game invites users to

explore various zones and discover new designs by creative director Demna Gvasalia. Luxury brands have also launched the avatar version of Donatella Versace at Complexland virtual festival Complexland while Pangaia has created a virtual gamified experience on top of a glacier to promote the launch of its new down alternative, Flwrdwn.

There are likely to be more such collaborations in 2021 as the focus on shared experiences including virtual trade shows, exclusive in-game drops and virtual try-on hauls will increase. As per Gina Chung Lee, Vice-President-Marketing and Creative, Gen G, brands will customize campaigns with the most receptive and valuable messages.

SPORTS TO BOOST DEMAND FOR WELLNESS PRODUCTS

Focus on real-life sports stars is likely to boost demand for wellness-themed products in 2021, encouraging luxury brands to collaborate with them. In January, Louis Vuitton signed a multi-year partnership deal with NBA to launch an annual capsule collection of apparel and accessories designed by Virgil Abloh, artistic director of menswear.

Luxury brands are competing with well-funded sportswear giants like Nike to rope in the biggest names in the industry, says John Collard, Chief Executive Officer, Sports Impact. Such deals help brands connect with buyers of their most accessible products like perfumes and accessories. Sports shoes will also be largest footwear category in the US this year, confirms NPD Group. Year 2021 will be big for fashion and sports, opines Collard of Sports Impact. The relationship between fashion and sports will evolve as brands will leverage sporting influencers to reach target audience. n


APPAREL / GST UPDATE

NO ITC ON CANTEEN SERVICES & BUSINESS PROMOTION

EXPENSES AND OTHER UPDATESBY CA BALKISHAN CHHABRA


The Finance Bill 2021, have proposed certain changes in CGST Act, 2017 and IGST Act, 2017 in order to curb input credit frauds and safeguard Government revenues. Government is putting more restriction on utilisation of input tax credit available to taxpayers. Earlier rule 36(4) was inserted, through which ITC was restricted up to 5 % on provisional basis of available ITC in GSTR-2A. After that rule 86B introduced, in which utilisation of input tax for output liability is restricted in excess to 99 per cent for specified taxpayers. Now in finance bill 2021, it is proposed that Zero rated supply with payment is restricted to certain specified class of taxpayers or specified supplies of goods or services. This will create extra financial burden in time of Covid-19 situation as Refund via the mode LUT/Without Payment of IGST takes more time in comparison to the mode with payment of IGST.

RESTRICTION ON CLAIM OF ITCNo ITC on canteen services and business promotion expenses incurred by the companyThe Hon’ble AAR Haryana in M/s. Musashi Auto Parts Pvt. Ltd. [Advance Ruling No. HAR/HAAR/R/ 2019-20/18 dated February 4, 2020] has held that Input Tax Credit (“ITC”) is not available with respect to canteen services provided by the employer to their employees and on business promotion expenses. Further, held that the distribution of food coupons among employees for part consideration will attract tax liability and the coupon value will form part of total taxable value of the service provider i.e., caterer.

Facts:-M/s. Musashi Auto Parts Pvt. Ltd. (“Applicant”) is engaged in the business of manufacturing and supply of auto parts. Since, the Applicant is a manufacturing company and have around 2400 full time working employees, it is mandatory for the Applicant to provide food facilities for employees, if the number of employees are more than 250 as per Section 46 of the Factories Act, 1948 (“Factories Act”).The Applicant incurs lot of expenses on maintenance of canteen facility including deployment of its own employees for supervision and management of

canteen operations. The Applicant also recovers a nominal amount (25% of the value charged by caterer) from the employees in form of card punch per meal or coupon to maintain discipline and prevent wastage of food and resources.Further, the Applicant also purchases edible items like sweets, dry fruits and gifts like electronics, gold and silver coins/articles for the purpose of business promotion.Issues:-• Whether the Applicant is eligible to claim ITC on the canteen services and on business promotion expenses• Whether distribution of coupons to employees attracts GST liability?Held:-The Hon’ble AAR Haryana in Advance Ruling No. HAR/HAAR/R/2019-20/18 dated February 4, 2020 has held as under:



ITC ON CANTEEN SERVICES• Observed that, the co joint reading of Section 16

and 17(5)(b) of the Central Goods and Services Tax Act, 2017 (“CGST Act”) suggests that the ITC with respect to food and beverages and outdoor catering shall be available only where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply.

• Further observed that, the Applicant is engaged in the business of manufacturing of automobiles and not in the business of provision of food or catering. The mandatory part of the Factories Act to provide meals to the employees does not mean that such provision is in the course of furtherance of business. Even if the provision of food and catering had been in the course of furtherance of business, the Applicant would not have been entitled to the input tax credit in light of the express bar provided under Section 17(5)(b)(i) of the CGST Act.

• Rejected the claim of the Applicant to take ITC for the canteen services as per the proviso under Section 17(5)(b) of the CGST Act and stated that a careful reading of Section 17(5) of the CGST Act suggests that said proviso is with regard to the provision contained in Section 17(5)(b)(iii) and not Section 17(5)(b)(i) ibid.

• Held that, the Applicant is not eligible to claim ITC with respect to the GST paid by it against the receipt of food and catering services supplied by the vendor.

DISTRIBUTION OF COUPONS• Observed that, the Applicant was

incurring expenditure with regard to many facilities like free cost of LPG gas supply, refrigerator, furniture etc. provided to the caterer. If the Applicant did not provide the supplies free of

cost to the caterer, the caterer would have had to make arrangements and incur expenditure and it would have led to an increase in the cost of supply. But in this case, these facilities are provided by the Applicant free of cost and in turn, the caterer provides food to the employees of the Applicant at a subsidized rate.

• Further observed that, the Applicant recovers a part of the amount paid to the caterer from the employees in order to maintain discipline and prevent food wastage but in essence, these are charges recovered by the Applicant in lieu of facilities provided to the caterer.

• Therefore, the Applicant has been incurring the cost of LPG etc. and the caterer is subsidizing the food in lieu of that, therefore, in light of the provisions of Section 15(2)(b) and 15(2)(e) of the CGST Act, the value of coupon is a part of the value of services provided by the caterer and as such the coupon value is taxable.

• Rejected the Applicant’s contention that as per Para 1 of Schedule III of the CGST Act, the amount recovered from the employees against the coupon is under employer-employee relationship and anything done under such relationship is exempt from being taxed.

ITC ON BUSINESS PROMOTION EXPENSES:• Observed that, the purchase and distribution of sweets, dry fruits, coins or silver items for the purpose of business promotion cannot be termed as an activity carried out in the course or furtherance of business by any stretch of imagination. Section 17(5)(h) of the CGST Act expressly bars ITC in respect of disposal of goods by way of gifts.• Held that, the Applicant has itself submitted that it was distributing these items to its customers and employees by way of presents. Hence, the Applicant is not eligible for claiming ITC on these items.



STANDARD OPERATING PROCEDURE (SOP) FOR IMPLEMENTATION OF THE PROVISION OF SUSPENSION OF REGISTRATIONS.As you are aware that vide notification No. 94/2020- Central Tax, dated 22.12.2020, sub-rule (2A) has been inserted to rule 21A of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules). The said provision provides for immediate suspension of registration of a person, as a measure to safeguard the interest of revenue, on observance of such discrepancies /anomalies which indicate violation of the provisions of Act and rules made thereunder; and that continuation of such registration poses immediate threat to revenue. 2.1 Sub-rule (2A) of rule 21A is reproduced

hereunder: “(2A) Where, a comparison of the returns furnished by a registered person under section 39 with (a) the details of outward supplies furnished in

FORM GSTR-1; or (b) the details of inward supplies derived based on

the details of outward supplies furnished by his suppliers in their FORM GSTR-1,

or such other analysis, as may be carried out on the recommendations of the Council, show that there are significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person, his registration shall be suspended and the said person shall be intimated in FORM GST REG-31, electronically, on the common portal, or by sending a communication to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said differences and anomalies and asking him to explain, within a period of thirty days, as to why his registration shall not be cancelled.”;2.2 Till the time an independent

functionality for FORM REG-31 is developed on the portal, in order to ensure uniformity in the implementation of the provisions of

above rule across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby provides the following guidelines for implementation of the provision of suspension of registrations under the said rule.

3. On the recommendation of the Council, the registration of specified taxpayers shall be suspended and system generated intimation for suspension and notice for cancellation of registration in FORM GST REG-31, containing the reasons of suspension, shall be sent to such taxpayers on their registered e-mail address. Till the time functionality for FORM REG-31 is made available on portal, such notice/intimation shall be made available to the taxpayer on their dashboard on common portal in FORM GST REG-17. The taxpayers will be able to view the notice in the “View/Notice and Order” tab post login.

4. The taxpayers, whose registrations are suspended (hereinafter referred to as “the said person”) under the above provisions, would be required to furnish reply to the jurisdictional tax officer within thirty days from the receipt of such notice / intimation, explaining the discrepancies/anomalies, if any, and shall furnish the details of compliances made or/and the reasons as to why their registration shouldn’t be cancelled: a. The said person would be required to reply to the jurisdictional officer against the notice for cancellation of registration sent to them, in FORM GST REG-18 online through Common Portal within the time limit of thirty days from the receipt of notice/ intimation. b. In case the intimation for suspension and notice for cancellation of registration is issued on ground of non -filing of returns, the said person may file all the due returns and submit the response. Similarly, in other scenarios as specified under FORM GST REG-31,


they may meet the requirements and submit the reply.

5.1 Post issuance of FORM GST REG-31 via email, the list of such taxpayers would be sent to the concerned Nodal officers of the CBIC/ States. Also, the system generated notice can be viewed by the jurisdictional proper officers on their Dashboard for suitable actions. Upon receipt of reply from the said person or on expiry of thirty days (reply period), a task would be created in the dashboard of the concerned proper officer under “Suo-moto cancellation proceeding”.

5.2 Proper officer, post examination of the response received from the said person, may pass an order either for dropping the proceedings for suspension/ cancellation of registration in FORM GST REG-20 or for cancellation of registration in FORM GST REG-19. Based on the action taken by the proper officer, the GSTIN status would be changed to “Active” or “Cancelled Suo-moto” as the case maybe.

5.3 Till the time independent functionality for FORM GST REG-31 is fully ready, it is advised that if the proper officer considers it appropriate to drop a proceeding any time after the issuance of FORM GST REG-31, he may advise the said person to furnish his reply on the common portal in FORM GST REG-18.

5.4 It is advised that in case the proper officer is prima-facie satisfied with the reply of the said person, he may revoke the suspension by passing an order in FORM GST REG-20. Post such revocation, if need be, the proper officer can continue with the detailed verification of the documents and recovery of short payment of tax, if any. Further, in such cases, after detailed verification or otherwise, if the proper officer finds that the registration of the said person is liable for cancellation, he can again initiate the proceeding of cancellation of registration by issuing notice in FORM GST REG-17.

PROPOSED AMENDMENTS IN FINANCE BILL, 2021Export with payment is restricted‘’Clause 114 of the Bill seeks to amend section 16 of the Integrated Goods and Services Tax Act, 2017 so as to-(i) Zero rating of supplies made to special

economic zone only when such supplies are for authorized operations.

(ii) Make provisions for restricting the zero rated supply on payment of integrated tax only to specified class of taxpayers or specified supplies of goods or services.

(iii) It further provides to link the foreign exchange remittance in case of export of goods with refund and further restricting

Condition to avail ITCA new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the

statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note. Filling of Annual Return on self-certification basis and scrapping of Audit under GST act.Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return. Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional. Interest on Net Cash LiabilitySection 50 of the CGST Act is being amended, retrospectively, to substitute




the proviso to sub-section (1) so as to charge interest on net cash liability with effect from the 1st July, 2017.

OTHER IMPORTANT NOTIFICAIONSExtension for sanction of pending IGST refund claims where the records have not been transmitted to ICEGATE1. Several representations are being received

by the Board in respect of IGST refunds which are pending due to mismatch of data between GSTR-1 & GSTR-3B. The resolution to the above problem was provided by the Board, as an interim measure, vide Circular No. 12/2018-Cus dated 29.05.2018 read with Circular No. 25/2019-Cus dated 27.08.2019 in respect of Shipping Bills filed up to 31.03.2019.

2. The IGST refunds relatable to the Shipping Bills filed after 31.03.2019 having mismatch error between GSTR-1 and GSTR-3B could not be processed and are held up on above account. Having regard to the fact that a substantial number of IGST refunds are stuck due to above error as functionality to amend GSTR-3B return is not available so far, there is a need to extend the facility as provided vide above Circular No. 12/2018-Cus dated 29.05.2018 and 25/20 I 9-Cus dated 27.08.2019 in respect of the Shipping Bills filed after 31.03.2019 as well.

3. The matter has been examined. It appears that the payments mismatch has happened even subsequent to the period covered in the above said Circulars. Therefore, in order to overcome the problems faced by the exporters, CBIC has decided that the solution provided in the Circular 12/2018-Customs read with Circular No. 25/2019-Customs would be applicable mutatis mutandis for the Shipping Bills filed during the financial year 2019- 20

and 2020-21 (i.e. in respect of all Shipping Bills filed/ to be filed up to 31.03.2021).

4. In respect of guidelines provided in Para 3A and 3B of the said Circular 12/2018-Customs, dated 29.05.2018. The comparison between the cumulative IGST payments in GSTR-1 and GSTR 3B would now be for the period April 2019 to March 2021. The corresponding CA certificate evidencing that there is no discrepancy between the IGST amount refunded on exports in terms of this Circular and the actual IGST amount paid on exports of goods for the period April 2019 to March 2020 and April. 2020 to March, 2021 shall be furnished by 31st March, 2021 and 30th October 2021, respectively.

5. The concerned Customs Zones shall provide the list of GSTINs, who have availed benefit under Para 3A & 3B of said circular and yet have not

submitted the CA certificate to the Board by the 15th April 2021 for the IGST refunds relatable to financial year 2019-20 and by 15th November, 2021 for financial year 2020-21.IGST refunds on exports-extension in SB005 alternate mechanismThe facility for resolving invoice mismatch errors with officer interface as an alternative measure for the specified period which was further extended, several times, based on representations received from Trade regarding continuance of such error. Last such extension has been granted for the Shipping Bills filed up to 31.12.2019 vide above referred Circular No. 22/2020-Customs dated 21.04.2020.There have been several representations from the Trade to extend the Officer Interface to resolve the genuine error committed during data entry. The issue has been examined. It is noticed that, the quantum of Shipping Bills pending on account of such errors being committed by the Trade have come


down significantly, but still it is occurring in some cases resulting in hold- up of IGST refunds.Keeping in view the above factual position, it has been decided as a measure of trade facilitation to keep the Officer Interface available on permanent basis to resolve such errors on payment of specified fee by the exporter. The exporter may avail the facility of correction of Invoice mismatch errors (error code SB-005) in respect of all past shipping bills, irrespective of its date of filling, by following the procedure as provided in the above Circulars, subject to payment of Rs. 1,000/- as fee towards such rendering of service by Customs Officers for correlation and verification of the claim. Due dates for filing of Form GSTR-3B from the Tax Period of January, 2021Government of India, Ministry of Finance (Department of Revenue), CBIC, vide Notification No 82/2020 – Central Tax, dated 10th Nov., 2020, has revised Rule 61 of the Central Goods and Services Tax Rules, 2017, to provide for staggered filing of Form GSTR-3B, for the tax periods from January, 2021, onwards, as under:

Sl. No

Class of registered persons who have Opted for

Having principal place of business in the State/ UT of

Due date of filing of Form GSTR- 3B, from January, 2021, onwards

1 Monthly filing of Form GSTR-3B

All States and UTs 20th of the following month

2 Quarterly filing of Form GSTR-3B

States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana and Andhra Pradesh, the Union territories of Daman and Diu, Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep

22nd of the month following the quarter

States of Himachal Pradesh, Punjab, Uttrakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi

24th of the month following the quarter

ADVISORY ON RECONCILIATION STATEMENT (GSTR-9C)Reconciliation statement to be filed in Form GSTR-9C requires the tax rate wise declaration of transactions for the concerned financial year. In the said form, tax amount pertaining to tax rates 1%, 1.5% and 7.5% in section III (table 9 and 11) and section V may be made in row/ under label ‘Others’ of the said tables, wherever applicable. n

[The author is Senior Partner in M/s. CHHABRA B K & ASSOCIATES (Delhi / NCR). He can be reached at [email protected] and # 9810380489 / 9871630858]


MINISTRY NOTIFICATIONS

APPAREL / NOTIFICATIONS


Sub. - Introduction of online e-Certificate Management System for Imports

DGFT vide their Trade Notice No. 41/2015-2020 dated February 15, 2021 has notified about the introduction of the new modules (online e-Certificate Management System) for processing of certain applications. From 22.02.2021 onwards, the following applications types are required to be submitted online through the importer/exporter’s dashboard on the DGFT Website –

i. I Card (as under ANF-2B)

ii. Free Sale and Commerce Certificate (as under ANF-2H & 2I)

iii. iEnd User Certificate (as under ANF-2J)

iv. Status Holder Certificate (as under ANF-3C)

All such certificates would be issued electronically with QR code and a Unique Document Identification Number (UDIN) for electronic verification.

Sub. - Provision for verification of the exporters declaration (self-certification basis) on the Rules of Origin under GSP Scheme – amendment in Para 2.104 (c) of Handbook of Procedures, 2015-2020.

DGFT vide their Public Notice No. 39/2015-2020 dated February 15, 2021 has notified about the insertion of procedure for verification of exporters declaration (self-certification basis) on the Rules of Origin under GSP Scheme under Chapter-2 of Handbook of Procedures, 2015-2020 in para 2.104 of Handbook of Procedures, 2015-2020.

Sub. - Amendment of Importer-Exporter Code (IEC) related provisions under Chapter-1 and Chapter-2 of Foreign Trade Policy, 2015-2020

DGFT vide its Notification No. 58/2015-20 dated February 12, 2021 has amended the IEC related provisions under Chapter- 1 and Chapter-2 of Foreign Trade Policy, 2015-2020.

MINISTRY NOTIFICATIONS



Specific attention is invited to the sub-para inserted under para 2.05 of chapter 2 of FTP, 2015-2020 that an IEC holder has to ensure that details in its IEC is updated electronically every year during April – June period. Even if, there are no changes in the IEC details, same also needs to be confirmed on-line. An IEC shall be deactivated, if it is not updated within the prescribed time.

Sub.-Electronic filing and Issuance of Preferential Certificate of Origin (CoO) for India’s Exports under India-Mercosur PTA and India-Thailand EHS w.e.f. 25th February 2021

DGFT vide its Trade Notice no. 43/2020-21 dated February, 23, 2021 has informed that the electronic platform for Preferential Certificate of Origin(CoO) is being expanded further to add two more FTAs/PTAs to facilitate electronic application of Preferential Certificates of Origin. The Preferential Certificate of Origin for exports to countries under the India-Mercosur Preferential Trade Agreement shall also be applied and issued from the CoO e-platform with effect from 25th February 2021. No manual application for such a CoO should be submitted to an issuing agency from 25th February 2021. Any manual applications submitted prior to the given date may however be processed by the issuing agencies.

Sub.-Issuance of Certificate of Origins (Non-Preferential) [CoOs(NP)] through Common Digital Platform (CDP).

DGFT vide its Trade Notice No. 42/2020-21 dated February 19, 2021 has notified about the issue of online CoO (NP) w.e.f 01.04.2021 (tentative date); wherein the online applications for CoO (NP) will be processed as per provisions of Para 2.108 of Handbook of Procedures based on the declaration of the exporter to the issuing agency, without any scrutiny of documents. However, uploaded documents like invoices etc. as prescribed in para 2.108 will be available for scrutiny at a later date

in case there is a need for cross verification etc. Further, a uniform fee of Rs. 100/- will be charged for each certificate so issued.

It has also been informed that while applicants can choose to avail CoO (NP) online or in manual mode till 31.03.2021, w.e.f 01.04.2021 applications will be accepted in online mode only. Further details in the matter will be notified.

Sub. - IGST refunds on exports-extension in SB005 alternate mechanism

CBIC vide its Circular No. 05/2021-Customs dated February 17, 2021 in reference to resolving invoice mis-match errors has decided to keep the Officer Interface available on permanent basis to resolve such errors on payment of specified fee by the exporter. The exporter may avail the facility of correction of Invoice mis-match errors (error code SB-005) in respect of all past shipping bills, irrespective of its date of filling, by following the procedure as provided in the above Circulars, subject to payment of Rs. 1,000/- as fee towards such rendering of service by Customs Officers for correlation and verification of the claim. Necessary amendments have been made in the Levy of Fee (Customs Documents) Regulations, 1970 vide Notification No.17/2021 dated February 17, 2021.

Sub. - Extension of Board’s Circular no. 12/2018-Customs dated 29.05.2018 for sanction of pending IGST refund claims where the records have not been transmitted to ICEGATE due to GSTR-1 and GSTR-3B mismatch error

CBIC vide its Circular No. 04/2021 dated 16th February, 2021 has stated that in respect of IGST refunds which are pending due to mis-match of data between GSTR-1 and GSTR-3B, CBIC had decided that the solution provided in the Circular 12/2018-Customs read with Circular No. 25/2019-Customs would be applicable mutatis mutandis for the Shipping Bills filed during the financial year 2019-20 and 2020-21 (i.e. in respect of all Shipping bills filed/to be filed upto 31.03.2021).

Sub: Inclusion of Noida in Towns of Export Excellence (TEE)

The Town of Export Excellence (TEE) is an important facilitation measure for exporters. As per Para 1.35 of FTP a cluster is eligible to be considered as a Towns of Export Excellence (TEE) when towns producing goods of Rs. 750 Crore or more. Accordingly, AEPC had requested for inclusion of these clusters in the TEE list. We are now happy to inform that DGFT has accepted our request for including Noida in the list of Towns of Export Excellence (TEE) vide Public Notice No. 40/2015-20 dated February 25, 2021.

There are 5 Towns of Export Excellence which belongs to Product Category Textiles and Apparel i.e. Tirupur, Ludhiana, Ahmedabad, Gurgaon and Noida.

Note- Please read complete notifications/trade notices/circulars for detailed information. n



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