Wages & Working Hours in the Textiles & Clothing Sector

Editor-NCMThe International Labour Organization (ILO) is holding a Forum of all the stake holders (workers, employers & representatives of government, intergovernmental and non-governmental organizations) from 23-25 Sept. 2014 to evolve future policy with regard to wages and working hours in the textiles, clothing, leather and footwear industries.

According to UNIDO, global average wages in the clothing industry are 35% lower and in the textiles industry are 24% lower than the manufacturing industry average wage. In some production countries the minimum wage remains below the national subsistence minimum. The ILO notes that the industry is distinctly divided into high-end and low-end (or “value”) production and brands. Factories involved in high-end production generally use better technology and more skilled workers. These factories have greater degree of multi-stakeholder initiative engagement resulting in better working conditions. But factories engaged in low-end or low-value production are considerably focused on cost cutting measures and mostly have poor working conditions. Many national economies rely on the clothing industry: 88% of total exports from Haiti, 79% from Bangladesh, 58% from Lesotho, 52% from Cambodia, 43% from Sri Lanka, 38% from Honduras, 36% from El Salvador, 31% from Mauritius, 20% from Madagascar, 18% from Tunisia, 17% from Pakistan, 15% from Morocco, 13% from Jordan, 12% from Viet Nam and 10% from Turkey are linked to the clothing industry. A glance at the world’s clothing retail reveals that North America represents 25%, Western Europe 27%, Eastern Europe and Turkey 10%, Japan and the Republic of Korea 13%. The rest of the world represents 25% of the total clothing retail. Another point worth noting is that while trade has grown, clothing prices have dipped by 30 to 40%.

Continue reading →

New Textile Policy with ‘Vision for 2024-25’ is Coming

Editor-NCMThe rapid changes in the textile and clothing supply chain globally have forced top textile export countries to review their future strategy and action plans considering the buyers’ likings, dis-likings, limitations and compulsions in mind. An Expert Committee, headed by Shri Ajay Shankar (Member Secretary of the National Manufacturing Competitiveness Council) had been constituted by the Ministry of Textiles to make fresh recommendations. The Committee, on July 28, 2014, submitted to the textile minister what is termed as “The draft Vision, Strategy and Action Plan 2024-25” after a detailed process of stakeholder consultations across the entire value chain. Continue reading →

New “First Sale” Rule For US Importers

Editor-NCMU.S. Customs and Border Protection (CBP) has issued a draft copy of a revised version of the Informed Compliance Publication on Bona Fide Sales & Sales for Exportation to the United States notifying changes to what is called ‘First Sale’ Program. According to various leading law firms, this publication along with the related reference materials should be on the ‘must read’ list for importers entering goods subject to a multi-tier transaction at the foreign manufacturer’s or so-called “first-sale” price.

The primary method of appraising imported merchandise is transaction value which is the price actually paid or payable for imported merchandise when sold for exportation to the US plus certain statutory additions. This draft notice clarifies that CBP will consider that merchandise is clearly destined for exportation to the US in a multi-tiered transaction when the evidence establishes that at the time the middleman purchased or contracted to purchase the imported merchandise from the foreign manufacturer, the only possible destination for the merchandise was the US (i.e., at the time of sale, the imported merchandise was irrevocably destined for the US). Continue reading →

When Politics Takes Precedence Over Economics

Editor-NCMI am supposed to write something related to textile and/or allied industries in my editorial because this is a trade publication and writing on politics may seem to be little misplaced. But I strongly feel that ultimately the political class is responsible for the country’s economic, social and cultural position.

Any mis-step in today’s highly interconnected, interdependent and conflicting world can cause immense harm to the country. But the governance requires making decisions and many times very hard and difficult decisions have to be taken rather quickly to have the desired result. Continue reading →

Industry’s Expectations from the New Govt. Are Too High

Editor-NCMA recent survey by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), involving nearly 450 CEOs from different sectors and regions, has revealed that India Inc.’s expectations from the new government are unprecedented at least in the last 20 years. These expectations range from revival of economic growth to fixing inflation and bringing down interest rates and unemployment within few months from the day our new Prime Minister takes charge.

Experts believe that the Indian economy is riddled with key problems that range from huge fiscal deficit, persistently high level of inflation, slow growth, and shrinking industrial output. The most important economic indicator requiring immediate action will be inflation. There are other issues also related with infrastructure, security, foreign policy, corruption and, law & order that need equally decisive and quuick actions. Continue reading →

It’s Time to Join Energy Efficiency Movement

Editor-NCMUnder the Government of India’s “Energy Conservation Act” of 2001, the Textile sector has been designated as one among fifteen most energy intensive sectors. Accordingly, under the National Mission on Enhanced Energy Efficiency program – launched by Bureau of Energy Efficiency (BEE), GoI – the scheme of Perform, Achieve and Trade (PAT) was initiated in March 2012 for industry to vigorously implement energy efficiency measures in all the designated sectors. This scheme is one of the first mandatory schemes for energy efficiency improvement in the industrial sector. Continue reading →

Exporters Should be Prepared for Subsidy-free Regime

Editor-NCMFor certain developing countries, which include India, the general prohibition on export subsidies does not apply until: (1) per capita GNP reaches a designated threshold of $1,000 per annum or (2) 8 years after the country achieves “export competitiveness” for a particular product. Article 27.6 of the SCM Agreement defines export competitiveness as the point when an exported product reaches a share of 3.25 percent of world trade for two consecutive calendar years. In February 2010, the United States formally requested the WTO SCM Committee Secretariat to compute the export competitiveness of India’s textile and apparel sector. The Committee’s calculations revealed that India had reached export competitiveness in the textile and apparel sector. On the basis of this, the United States has been pressing India to identify the current export subsidy programs and commit to a phase-out schedule to end all such programs to the extent they benefit the textile and apparel sector. In response, India has raised certain technical questions as to the appropriate definition of “product” and the precise starting point of the phase-out period under Articles 27.5 and 27.6. Continue reading →

Needs of Society Are Changing Consumers’ Demands & Producers’ Business

Editor-NCMA new breed of NGOs or ‘not-for-profit’ organisations has mushroomed all over the globe claiming to represent the society and influencing consumers’ demands from producers keeping in mind the future needs of the coming generations of world citizens with regard to the fast depleting natural resources. They are working for what is called “sustainable” growth in terms of production, consumption, and work practices. Hundreds of organisations – both commercial and social – have evolved ‘rigorous’ social and environmental best practices encompassing almost all spheres of human activities and insist that consumers as well as producers/providers must follow these standards to save the planet from extinction. These organisations have their own “certification” the process of evaluation and award of which varies widely. The certification is for a wide ranging areas like fair trade, social and environmental performance, natural, organic or green production, carbon foot print, safety, sustainability and numerous other activities. The final outcome is expected to be the overall improvement in the quality of life in our communities and the future generations. Continue reading →