MARKET WATCH
Khadi Demand Surges Due
to Elections, Sales Up By
29 Per Cent in FY 2018–19
Vinay Kumar Saxena, the chairman of Khadi
and Village Industries Commission (KVIC),
informed that after 2013–14, the khadi business
registered a fourfold growth in the last five years.
Reflecting a surge in the demand this poll
season, the sale of khadi apparel has registered
a record high of R3,215 crore, up by 29 per cent,
in the financial year that ended on March, 2019,
compared to the previous fiscal year.
During summers, politicians and their
supporters have to spend a lot of time under the
sun, due to which they prefer to wear khadi, which
is suitable for hot weather. He added that the
demand for khadi is growing across the country,
especially in Delhi-NCR, Uttar Pradesh, and Bihar.
Out of the total sale in the previous financial
year, 40 per cent was of raw cloth, while the rest
60 per cent was of ready-made apparel, Saxena
said. He added that there is a sustained demand
for khadi dresses made by village workers. There
are more than 1,000 stores of KVIC in Uttar
Pradesh, while Bihar has 8,060 of these shops,
Saxena said.
The chairman said that sales of khadi apparel
grew by around seven per cent from 2004 to
2014, while in the past five years, the sales
increased by more than 10 per cent.
Shopclues to Ramp Up
Offline Expansion, Open
100 Franchise Stores
E-commerce platform Shopclues is looking to
expand its offline presence in the Indian market
by opening around 100 franchise stores across
the country in the fiscal year 2019-20. With online
sales slowing down, Shopclues is looking to go
the omnichannel route in India for growth, and
expecting strong sales from its offline stores.
Shopclues is aiming to go offline to contribute
fifteen per cent to its overall orders for the
ongoing fiscal year.
The Gurgaon-based company entered the
offline market last year with its first store in
Lucknow, and since then, has expanded to other
states. It will further strengthen its offline network
in tier II and III cities in states like West Bengal,
Odisha, UP, Bihar, Assam, Meghalaya, and
Sikkim, where buyers still have a preference for
brick-and-mortar stores.
“The strategy behind opening offline stores is
to address local needs with local products and in
the local language,” said Rikita Taneja, Director
and Business Head, Fashion, at Shopclues.
With its offline expansion, Shopclues is aiming
to be profitable by the end of the current fiscal
year. It had posted a revenue of R273 crore
($39.4 million) for the financial year 2017–18, and
also managed to narrow down its losses by 40
per cent, to R208 crore.
TEXPROCIL Welcomes Inclusion of Merchant
Exporters Under Interest Equalisation Scheme
The Cabinet Committee on Economic Affairs has given its approval to the proposal of the Department of
Commerce for including merchant exporters under the Interest Equalisation Scheme (IES) for Pre- and
Post-Shipment Rupee Export Credit. Welcoming the decision, Dr K V Srinivasan, Chairman of the Cotton
Textiles Export Promotion Council (TEXPROCIL), said, “This will significantly reduce the cost of finance for
Dr K V Srinivasan,
the merchant exporters who contribute substantially towards textiles exports, and make them
Chairman, TEXPROCIL
more competitive.”
Interest Equalization Scheme at 5 per cent is available for Pre-Shipment and Post-Shipment credits on exports of all
products manufactured and exported by Micro, Small and Medium Enterprises (MSMEs), and three per cent on 416 specified
tariff lines for non-MSMEs. However, the scheme is available only to manufacturer exporters and not to merchant exporters.
The Chairman pointed out that both manufacturer exporters as well as merchant exporters require finance to execute
export orders, and the decision has therefore come as a huge relief for merchant exporters, as the cost of export finance
will come down substantially. According to him, the coverage of merchant exporters under the Interest Equalisation scheme
will encourage them to export more products from the MSME sector, which contributes significantly towards employment
generation, especially for women.
Dr Srinivasan urged the government to cover cotton yarn under the scheme. He pointed out that cotton yarn, although
being a value-added product, is the only textile product which has not been given any benefits under the Foreign Trade
Policy. According to him, inclusion of cotton yarn under the scheme will encourage exports of this product, which, in turn, will
benefit cotton farmers.
28
I APPAREL I
June 2019