Apparel March 2020 Apparel March 2020 issue | Page 59

INDUSTRY INSIGHTS
2. ISSUES IN IMPORTS OF SYNTHETIC
TEXTILES AND TRIMS
India imports USD460 million worth of synthetic
yarn and USD360 million worth of synthetic fabric
from China annually. It also imports over USD140
million worth of accessories like buttons, zippers,
hangers and needles. India does not have the
domestic supply base to cater to such a huge
demand of these raw materials.
With the epidemic, Chinese textile factories
have halted operations since the Chinese
New Year. If the outbreak continues, Indian
Garment Manufacturers will need to look at other
alternatives, including local sourcing, which in turn
may increase the finished goods cost by three
to five per cent. In addition to this, identifying
vendors in such a short time can take a toll on
lead times, quality and cost.
3. GLOBAL DEMAND OF PROTECTIVE
MASKS INCREASES
China is importing large quantities of medical
protective gears including surgical masks and
protective clothing across the globe. Sales of
such products in other South East countries and
even western nations have jumped drastically.
The supply of such products is not able to keep
up with the demand.
On January 31, 2020, the Indian government
banned exports of all personal protection
equipment, including clothing and masks to avoid
any shortage of it in India. However, almost a
week later, this ban lifted in order to help China
battle the disease.
4. INDIAN SYNTHETIC VALUE CHAIN
NOT ABLE TO REALISE BENEFIT OF
ANTI-DUMPING DUTY REMOVAL ON PTA
The Indian government provided major relief
to synthetic yarn manufactures in India by
abolishing the 2.5 per cent Anti-Dumping Duty
on Purified Tephthalic Acid (PTA) in order to
strengthen the country’s Synthetic Textiles
Industry. However, Hubei, and much of central
China, the manufacturing hub of feedstock, is
at a virtual standstill. Hence, the imports of PTA
from China are not an option at the moment and
manufacturers are still forced to rely on domestic
supply to fulfil their demand.
5. APPAREL ORDER DIVERSION
FROM CHINA
During the month of January, buyers from Europe
and USA generally travel to China to negotiate
with garment exporters for the next season.
However, due to the Coronavirus scare, most of
the buyers are looking at alternatives.
One factor that still plays in favour of China
is that a number of companies have already
produced their garments for the spring and
summer season. Workers often go home on
vacations around Chinese New Year – just
ahead of the outbreak – so companies plan for a
production slowdown around this time.
However, if the situation prevails for the next
couple of months, buyers will be forced to
seriously explore other options where Bangladesh
and India stand to gain ahead of Vietnam,
Cambodia or any other South East Asian supplier.
India scores ahead as it has a complete supply
chain but the flip side of this is that Indian
garment manufacturers neither have the scale nor
the cost competitiveness to present themselves
as a credible alternate.
APPAREL
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March 2020
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