Cotlook A Index - Cents/lb (Change from previous day)

21-08-2019 70.50 (Unch)

22-08-2018 93.05

22-08-2017 77.90

New York Cotton Futures (Cents/lb) As on 23.08.2019 (Change from

previous day)

Oct 2019 59.98 (-0.10)

Dec 2019 60.12 (+0.50)

Mar 2020 60.49 (-0.23)

23rd August

2019

WTO reforms must be taken up by all member countries: Piyush Goyal

Niti Aayog has a prescription for ailing economy and it starts with

interest rate cuts

Weak exports, uncompetitive prices to hit cotton spinners, says report

Sri Lanka organises business forum in Gujarat

Indonesian textile companies take hit as China shifts focus to SEA

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

Aug 2019 21280 (+140)

Cotton 12790 (+50) Oct 2019 19920 (+50)

Yarn 20515 (+35) Nov 2019 19440 (+20)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- WTO reforms must be taken up by all member countries: Piyush

Goyal

Niti Aayog has a prescription for ailing economy and it starts with

interest rate cuts

Economic slowdown: Export focus fine, but there’s more to growth

16 retail fashion brands commit to sustainability

SRTEPC’s focus to boost Indian Textile industry as Global players

taking advantage of the US and China trade war

Weak exports, uncompetitive prices to hit cotton spinners,

says report

Sri Lanka organises business forum in Gujarat

Boosting growth in a protectionist world

New Wage Code will reduce litigations under various labour laws:

Experts

Pakistan allows partial trade via Attari ICP

Amit Aggarwal showcases collection made from R|Elan fabric

-------------------------------------------------------------------------------

US-China trade war uncertainty could cost $585 bn by 2021

Indonesian textile companies take hit as China shifts focus to SEA

Made in Vietnam: Draft Regulations on Rules of Origin

Vietnam’s exports keep rising this year

Finding Partners Along the Supply-Chain at Sourcing at MAGIC

---------------------------------------------------------- ----------

NATIONAL

---------------------

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

WTO reforms must be taken up by all member countries: Piyush Goyal

(Source: Press Information Bureau, August 22, 2019)

The time has come to take on the policies of protectionism and unilateral measures by

some developed countries that are having an adverse effect on global free trade and if

this continues there will be recession in the world and no country will escape it, said

Union Minister of Commerce & Industry and Railways, Piyush Goyal.

He was speaking at an international dialogue on South-South and Triangular

Cooperation today in New Delhi. Commerce and Industry Minister urged that all

member countries must take up reforms of the WTO and not deal with issues in a

piecemeal manner. We cannot afford to walk away from the current system but all

member countries of the WTO must re-engage to ensure that the rule-based,

transparent, and non-discriminatory governance that free-trade requires is taken

forward honestly and in a non-discriminatory manner and keeping in mind the interests

of different member countries with disparate GDP.

Piyush Goyal further stated that the policies of protectionism being followed by some

countries in the developed world are affecting engagement between countries for trade

in goods, services and protection of investments.

The aspirations of people cannot be held back for a better life: for sustainable growth of

the seven billion people of the world and India is committed to the Sustainable

Development Goals (SDGs) and believes that peoples’ aspirations cannot be held back

till 2030, said the Commerce and Industry Minister. India is not going to wait till 2030

to give access to energy, literacy and clean potable water to its people, India is fast-

tracking its efforts to reach the SDGs to the last man at the bottom of the pyramid. India

also desires that this pace of development reaches people in the rest of the world.

South-South cooperation is a broad framework of collaboration among countries of the

South in the political, economic, social, cultural, environmental and technical domains.

Involving two or more developing countries, it can take place on a bilateral, regional,

intraregional, or interregional basis. South-South cooperation is a manifestation of

solidarity among peoples and countries of the South and the attainment of the goals of

Sustainable Development.

Commerce and Industry Minister hoped that the South-South and Triangular

Cooperation will help the developed world become a part of the developing world’s

growth agenda.

Home

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4 CITI-NEWS LETTER

Niti Aayog has a prescription for ailing economy and it starts with interest

rate cuts

(Source: CNBC 18, August 22, 2019)

Niti Aayog has suggested a reduction in the interest rate from 8 percent to 5

percent on new small savings in a phased manner spread over 24 months.

It has also suggested a delay in merger of public sector banks at this stage, and

recapitalization of the banks on the basis of performance soon, as announced in

the budget this year.

On the tax front, the think tank has pushed for a rollback of dividend distribution

tax and buyback tax which was levied in the 2019 Union Budget.

Niti Aayog has proposed a multi-pronged strategy to revive the ailing economy. Among

the several measures, the government policy think tank has suggested a reduction in the

interest rate from 8 percent to 5 percent on new small savings in a phased manner

spread over 24 months.

If the government agrees to the proposal, implementation could begin starting October

1, 2019, people aware of the matter told CNBC-TV18.

Niti Aayog has also suggested the creation of a new special purpose vehicle (SPV) based

on Specified Undertaking of the Unit Trust of India (SUUTI) to raise bonds and invest in

preferred equity in non-banking finance companies (NBFCs) in a bid to support the

struggling sector.

SUUTI, like the SPV, could have a net worth of about Rs 38,000 crore.

Niti Aayog has suggested a delay in merger of public sector banks (PSBs) at this stage,

and recapitalization of the banks on the basis of performance soon, as announced in the

annual budget this year.

On the tax front, the think tank has pushed for a rollback of dividend distribution tax

and buyback tax which was levied in the 2019 Union Budget. It believes that capital

gains due to a rise in market value as a consequence of the rollback will more than offset

revenue losses for the government.

Proposal for the automobile sector includes allowing the BS4 buses purchased in the

next six months be allowed to operate for the next 10 years — provided they comply with

pollution emission norms. Niti Aayog estimates a shortage of over 80-90 percent buses

in India and this move will allow for clearance of the inventory.

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5 CITI-NEWS LETTER

On the scrappage policy for the sector, the think tank has suggested giving incentive

vouchers for commercial vehicle scrapping at Rs 50,000, passenger vehicles at Rs

20,000 and two- three-wheelers at Rs 5,000 in order to facilitate the purchase of new

vehicles, a step, it believes, will clear pending inventory.

For the textile sector, it has proposed the removal of inverted duty structure on man-

made fibers and abolition of anti-dumping duties on purified terephthalic acid and

viscose staple fiber. India had imposed anti-dumping duty on purified terephthalic acid

in July 2019 and viscose staple fiber in 2016.

Niti Aayog is also of the view that there should be a monitoring mechanism to

implement and fast track the government's decision of 2016 when it was decided that

departments and public sector undertakings (PSUs) should pay up 75 percent of the

arbitral awards in contractual disputes.

Prime Minister Narendra Modi is slated to meet finance ministry and Niti Aayog

officials to take stock of the economy and discuss its revival, people aware of the

development have told CNBC-TV18.

Home

Economic slowdown: Export focus fine, but there’s more to growth

(Source: Financial Express, August 23, 2019)

The statements underscore the government’s discomfiture to loosen its purse strings in a

big way, given the ‘limited fiscal space’ amid subdued tax collection growth.

Nevertheless, it will likely opt for targeted interventions in critical sectors like auto,

MSMEs and infrastructure. Also, it could front-load its spending to spur demand.

Top government officials on Thursday sought to temper expectations of a big-bang

stimulus package to revive sagging economic growth, aiding a slide in the stock markets.

Speaking at the Hero MindMine Summit 2019, chief economic advisor Krishnamurthy

Subramanian said government intervention to bail out the private sector every time it

goes through a “sunset phase” creates a “moral hazard” and is an “anathema” for the

market economy. At the same event, power secretary Subhash Chandra Garg — who was

the finance secretary until late July — held that reduction in interest rates and easier

availability of credit to the private sector are better tools to boost growth than a fiscal

stimulus.

Garg said economic growth in the first quarter could be around 5.5-6% (against a five-

year low of 5.8% in the March quarter) mainly due to subdued government expenditure

on account of elections, and some demand compression. After a slowdown in the

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6 CITI-NEWS LETTER

budgeted expenditure in Q1FY20, the Centre may, however, step up spending in Q2 to

reach the spending trend of 53-54% by September (H1).

Separately, in a reply on Twitter, Subramanian asserted that the government was

“identifying the structural constraints faced by industry and working to remove them”.

This will “empower industry to invest and foster the virtuous cycle” of growth led by

investments.

The statements underscore the government’s discomfiture to loosen its purse strings in

a big way, given the ‘limited fiscal space’ amid subdued tax collection growth.

Nevertheless, it will likely opt for targeted interventions in critical sectors like auto,

MSMEs and infrastructure. Also, it could front-load its spending to spur demand.

Already, NITI Aayog has proposed a comprehensive scrappage policy, as part of which

buyers of new vehicles will get incentives in lieu of scrapping their old vehicles. While an

incentive of Rs 50,000 is proposed for 10-year old commercial vehicles, buyers of

passenger vehicles will get Rs 20,000. Buyers of new two and three wheelers will get a

relief of Rs 5,000, a source told FE.

Niti Aayog is also learnt to have suggested that the interest rates on elevated small

savings deposits, a sore point with many banks, be cut over the next two years from 8%

to 5%, the taxes on dividend distribution and buybacks be rolled back and the

government clear its arbitration award dues expeditiously. According to a CNBC-TV18

report, the government has already paid 75% arbitration awards in contractual disputes

in 2016.

While the central bank and India Inc have called for a greater transmission of the RBI’s

repo rate cuts (110 basis points since February), many banks have shied away from

doing so, as the elevated interest rates on small savings, fixed by the government, have

forced them to pay more on their deposit rates.

Speaking at the event, Subramanian said: “I think we expect the government to use tax-

payers’ money to intervene every time there is a sunset phase.” “You introduce possible

moral hazard from too-big-to-fail and possibility of a situation where profits are private

and losses are socialized, which is basically an anathema to the way the market economy

functions.”

Earlier, the CEA had said the government support is required at the time of infancy, and

not when one has grown up. “I would say that the private sector has been in India since

1991 (liberalisation) and is now a 30-year-old kid. A 30-year-old kid, a man, now needs

to start saying that I can stand on my own feet. I don’t need to go to papa.”

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7 CITI-NEWS LETTER

The finance ministry is weighing proposals to “ring-fence” foreign portfolio investors

(FPIs) structured as trusts from the higher surcharge and review the dividend

distribution tax (DDT) and the long-term capital gains (LTCG) tax.

While a cut in the corporate tax rate and personal income tax reliefs have been

recommended by the direct tax code panel, analysts say the government will have to

forgo Rs 1.2 lakh crore if all the panel’s suggestions for tax reductions are accepted.

However, this can be done if the government withdraws various exemptions extended to

both companies and individuals.

To boost exports, while the government is considering “full reimbursement” of various

imposts on outbound shipment, the Reserve Bank of India has proposed to ease

priority-sector lending norms for exporters. Currently, exporters with a turnover of up

to Rs 100 crore each are eligible for credit under the priority-sector norms. This limit is

likely to be scrapped or doubled so that more exporters are benefitted.

Even though tepid growth in tax revenue is constraining the fiscal situation, some

experts believe that the fiscal space for a much-needed stimulus could indeed be found.

Over 5% of GDP is lost due to tax exemptions, they point out, adding that some 1.5% of

GDP as spending accounted for is not actually spent.

Home

16 retail fashion brands commit to sustainability

(Source: Outlook India, August 22, 2019)

Sixteen retail fashion brands have signed the Su.Re (sustainability resolution) project

launched by the Textile Ministry, IMG Reliance and Clothing Manufacturers Association

Of India (CMAI).

Textile Minister Smriti Irani launched the project, in association with the UN, on

Thursday at the Lakme Fashion Week Winter/Festive 2019 being held here.

Retail brands like Spykar, Westside, Trends, Shoppers Stop, fbb, House of Anita Dogre

and Lifestyle and Max joined the movement that aims to develop sustainable sourcing

policy for consistent prioritising and utilising certified raw materials that have a positive

impact on the environment.

In her address at the event which was also attended by Renata Lok-Dessallien, UN

Resident Coordinator in India, Irani said: "Never before in a population our size has

voluntarily driven the retail force of India and fashion elite along with the government

to come together at one platform. That this has happened voluntarily makes me proud.

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8 CITI-NEWS LETTER

On October 2, we shall step into the 150th year of Mahatma Gandhi''s birthday. Gandhi

said to the world, ''be the change you want to be''. And today, the resolution on

sustainability is a reflective of that very thought of the Mahatma."

She said that sustainability is the fourth criteria for 57 per cent of the consumers of the

apparel and design industry. "This (project) makes it not only responsible business but

also smart business. This project will impact worth Rs 30,000 crore in the market.

Everything that we consume, we must consume responsibly."

Jaspreet Chandok, Vice President and Head of Fashion, IMG Reliance, said: "This is a

true confluence of what we want to stand for in fashion in the country which is a melting

point of ideas that brings transformational change. Today is a major step towards that

change with the launch of Su.Re which is the first and the largest initiative by the

fashion industry.

"This initiative is just a start point. In the next five years, it will reach millions and

millions of garments in the country turning from non-sustainable resources to

sustainable resources."

Home

SRTEPC’s focus to boost Indian Textile industry as Global players taking

advantage of the US and China trade war

(Source: APN News, August 22, 2019)

Textile sector is one of the oldest industries in Indian Economy. It is one of the largest

contributing sectors to India’s export business with approximately 14% of total

merchandise export. The industry is currently pegged at around US$ 140 Billion and is

expected to increase to US$ 350 by 2025. Indian textile industry has tremendous

growth potential and is not only the world but is the largest employer in the

manufacturing sector with 45 million people employing directly.

Looking at the growing opportunity for Man-Made Fibre & Blended Textiles globally

and also to take advantage of the ongoing trade war between US & China, SRTEPC has

inaugurated the 4th edition of “Source India 2019” in Mumbai today.

Speaking at the event, Mr. Ronak Rughani, Chairman, STREPC, said the trade

war has opened up an opportunity, which will help our stagnant exports grow by 5 to 7

per cent in one-and-half years. We are thankful to our Government and particularly to

our Hon’ble Minister of Textiles, Smt. Smriti Zubin Irani ji for extending us continued

support and guidance.

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9 CITI-NEWS LETTER

Talking about the event, Smt. Smriti Zubin Irani, Minister of Textiles, said It is

noteworthy to mention that over the years the global trend has been changing and MMF

textiles have been in demand for its versatility and adaptability. Indian MMF textiles is

growing at a rapid pace and the time has come to project it as a reliable source of quality

MMF textile products. “Source India” is an appropriate platform for Indian exhibitors

and overseas buyers to meet under a single roof”.

“Source India 2019”, in Mumbai witnessed contribution from more than 100 leading

Indian textile companies displaying their latest range of Indian textiles items including

fabrics, yarn, made-ups, fibre home textiles, and technical textiles in an area of around

7000 square meters. Around 180 leading buyers from 40 countries and 20 international

buying houses visited to place orders for forthcoming season.

During 3 day Source India 2019, leading textile buyers from Latin America, South Asia,

EU region, Argentina, Colombia, Peru, Brazil, Mexico, USA, Japan, Vietnam, Thailand,

South Africa, Uganda, Kenya, Nigeria, Egypt, Morocco, Turkey, Romania, Uzbekistan,

Czech Republic, Australia, Denmark, Ecuador, Egypt, El Salvador, Guatemala,

Honduras, Iran, Italy, Mauritius, Myanmar, Oman, Panama, Poland, Russia, Slovakia,

Sri Lanka, UAE, etc., participated in Source India 2019 Mumbai.

The aim of the event is to showcase strength to the entire gamut of textile and apparel

value chain to the world and establish India as a global textile sourcing hub and

investment destination. It is an ideal platform for the international buyer to source their

requirements for Indian Man-made Fibre & blended Textile value chain.

Home

Weak exports, uncompetitive prices to hit cotton spinners, says report

(Source: Financial Express, August 20, 2019)

With India exporting roughly one-third of its cotton yarn production every year, trends

in export demand play a crucial role in determining the overall performance of the

domestic spinning sector.

Weak export demand and uncompetitive prices are expected to hit the performance of

domestic cotton spinners in FY20, following a brief recovery in FY19, a report said. The

degrowth in volumes due to lower export demand and a sharper decline in realisations

vis-a-vis cotton prices because of higher minimum support price (MSP)-led floor price

for the crop are expected to result in a decline in turnover and an estimated 100-150 bps

compression in operating profitability of domestic cotton spinners during FY20, said an

Icra report.

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10 CITI-NEWS LETTER

A large proportion of spinners have not undertaken capacity expansions in the recent

years, given the unencouraging demand trends during this period, coupled with the

discontinuance of subsidy benefits under the Technology Upgradation Fund Scheme

(TUFS) for the spinning segment. This has resulted in a consistent decline in term

borrowings for such companies in recent years with scheduled debt repayments, due to

which the impact on their debt coverage metrics and liquidity could be lower, despite

industry pressures.

With India exporting roughly one-third of its cotton yarn production every year, trends

in export demand play a crucial role in determining the overall performance of the

domestic spinning sector.

India’s cotton yarn export quantity declined by 33% y-o-y in Q1FY20 (41% in May and

June 2019) and stood at a seven-year low of 59 million kg in June 2019. As a result,

multiple textile associations across the country have reported stock pile-ups and

production cuts by spinning mills in recent months. Whereas markets other than China,

which has been the largest cotton yarn market for India, had supported the demand

during FY17 and FY18 when exports to China fell, the pressure is more broad-based

now.

Compared to a 50% y-o-y decline in cotton yarn exports to China during Q1FY20,

exports to other markets too declined by 20%, the report said. Jayanta Roy, senior vice-

president and group head, Corporate Sector Ratings, Icra, said, “Based on the emerging

trends, we have revised the credit outlook on the Indian cotton spinning industry to

‘Negative’, as the profitability and debt coverage metrics are expected to moderate from

the current levels. The impact is likely to be more pronounced for leveraged companies,

that have undertaken a sizeable debt-funded capital expansion in the recent years and

have higher repayments scheduled in the near term.”

“The pressure is primarily originating from higher cotton prices in the domestic market,

which has made Indian yarn manufacturers uncompetitive in the international markets.

As a result, the near-term outlook on Indian cotton yarn exports is quite weak at

present,” Roy added.

Home

Sri Lanka organises business forum in Gujarat

(Source: Fibre2Fashion, August 22, 2019)

Sri Lankan minister of development strategies and international trade Malik

Samarawickrama recently invited Indian investors to enjoy the nation’s geographical

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11 CITI-NEWS LETTER

advantage, port connectivity, preferential tariff access to large markets and competent

human resource pool. He was addressing a business forum organised by Sri Lanka’s

Board of Investment in Gujarat.

The forum was organised at the Chamber of Commerce and Industry (GCCI) in

Ahmedabad.

Over 100 leading Indian businessmen from Gujarat representing diverse sectors

participated in the forum, according to Sri Lankan media reports.

GCCI president Durgash V Buch said Gujarat and Sri Lanka can be partners in

promoting agro-processing Industries, textile, petrochemicals, spices and tea.

Out of GCCI’s total member strength of 6,000, at least 1,000 deal with Sri Lanka on a

regular basis in sectors like refractories, pharmaceuticals, apparel, plastic packaging,

starch, petroleum and petro products, tea and other agro-products, he added.

Home

Boosting growth in a protectionist world

(Source: G Parthasarathy, The Hindu Business Line, August 22, 2019)

Improving ‘ease of doing business’ apart, India needs to develop a vibrant electronics

sector and leverage the FTAs better

The advent of the twenty-first century marked the turning point in India’s economic

growth. The end of US and western sanctions, imposed after our nuclear tests in 1998,

led to an economic boom, in the first decade of the 21st century.

This economic boom was triggered by the economic liberalisation ushered in by Prime

Minister Narasimha Rao. The Indian economy experienced an over 9 per cent rate of

growth, during three consecutive years, of 9.48 per cent in 2005-06, 9.57 per cent in

2006-07 and 9.32 per cent in 2007-08. The rate of growth, thereafter, reached 8.59 per

cent in 2009-10.

The rates of growth in India have, however, been lower in the present decade, varying

between 6.7 per cent and 7.4 per cent, with an unusual fall to a mere 3.2 per cent, in

2013. While these rates of growth are relatively high by global standards, they do not

match the levels China continuously achieved for over two decades, when Deng Xiao

Ping’s reforms began paying rich dividends.

The growth in India’s global merchandise trade during the first decade of the present

century far exceeded the country’s domestic growth figures. Merchandise exports

expanded significantly, rising from $44.2 billion in 2001-02 to $306 billion in 2011-12.

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12 CITI-NEWS LETTER

The same cannot be said of our exports of goods in the second decade of the century.

Merchandise exports have remained almost stagnant in this period, at around $300

billion annually, while our annual imports have now gone past $500 billion.

India’s service exports, spearheaded by information technology, however, rose from

$137 billion in 2011-12 to $205 billion in 2018-19. But, continually high deficits in world

trade of goods and services are neither desirable, nor sustainable.

Ambitious goal

Prime Minister Modi has set the country an ambitious goal of building a $5 trillion

economy by 2025. This will necessitate an economic growth of well over 8 per cent per

annum — a target we have achieved for a few years, during the past two decades.

Modi recently alluded to initiatives to boost the capital of public sector banks, promote

productivity and exports of agricultural products, boost industrial production and

incentivise the services sector, while fostering the ease of doing business.

He expressed understanding of concerns of the business community and assured that

honest taxpayers would not be harassed. Foreign investors, however, note that setting

up new industries in India is a daunting and often frustrating task. Some State

Governments, however, recognise the need to be investor-friendly.

Trump effect

The external challenges in promoting trade and industry today are more formidable

than what prevailed a few years ago. Globalisation is now virtually a swear word in the

US and parts of the EU, where industries unable to face foreign competition, especially

from China, are crying foul. India is losing its competitive edge in traditional industries

like textiles, to countries like Bangladesh and Vietnam.

President Trump’s protectionist policies have hurt America’s friends, allies and foes

alike. His moves against globalisation, commenced as soon as he assumed office, by US

withdrawal from participation in the Trans-Pacific Partnership. This grouping linked

major economies across the Asia-Pacific, from the US, Canada and Mexico, to Australia,

Japan and members of ASEAN.

He then unilaterally raised protectionist walls against major partners including Canada,

Mexico, China, Japan and South Korea.

The US has also clamped additional duties on a wide range of products from allies,

ranging from Germany and France, to Japan and South Korea. The most wide-ranging

US Trade sanctions have been imposed on China, though Chinese business and trade

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13 CITI-NEWS LETTER

practices have not exactly been ethical. China had a massive trade surplus with the US,

of $420 billion last year.

Trump’s actions have triggered the biggest trade war in contemporary history, with

China retaliating on some US exports, with little, or no impact. While the US trade

deficit has reduced after the imposition of trade sanctions, China is already feeling the

impact of these sanctions on its economic growth.

While the US and China could well reach an agreement, in the course of time, this trade

dispute has global repercussions. India, like many others, has itself been hit hard by

enhanced American duties on a range of products like aluminium and steel, and

measures to end of trade preferences, it enjoyed as a developing country. India has

retaliated, with its own sanctions on a number of US products. Trump has indicated that

like China, India will get no benefits available traditionally to developing countries.

New Delhi also recognises that its own trade practices are now seen as being excessively

protectionist, with a large number of countries prepared to seek remedial measures, by

reference to the WTO. Negotiations have commenced with the US, which remains

concerned by existing and new Indian protectionist tariffs/restrictions, on items like

medical devices, apart from electronics and telecom products.

There is obviously going to be serious bargaining ahead, before we can conclude a

satisfactory trade agreement with the US. India must, however, realise that it cannot

become a significant, modern economic power unless it develops a vibrant electronics

industry, with an indigenous capability for research and development and a substantial

manufacturing capability to produce crucial items like semi-conductors and computer

chips.

‘Act East’ policy

India’s “Act East” policies have included Free Trade Agreements with ASEAN, Japan

and South Korea. These agreements have brought us trade benefits, as our regional

partners have made good use of them. We need to significantly improve our use of these

arrangements.

We face difficult choices in dealing with negotiations, now under way, for an Indo-

Pacific economic community, labelled as the “Regional Comprehensive Economic

Partnership” (RCEP), which includes ASEAN members, together with Japan, China,

South Korea, New Zealand and Australia.

There are understandably serious misgivings about joining the RCEP, given our

concerns about China’s trade practices and our huge trade deficit with Beijing. These

challenges have to be faced and overcome, while moving ahead in building the $5

trillion economy that Prime Minister Modi envisages by 2025.

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14 CITI-NEWS LETTER

With enthusiasm for post Cold War style “globalisation” declining in Europe and the US,

India now faces serious choices it has to make, given the security and diplomatic

challenges it faces, from an increasingly assertive China.

While Chinese military and economic power can be balanced by partnerships with like-

minded countries like Japan, Vietnam and Indonesia, India will have little leverage left

with its “Act East” partners, if its economy lacks the strength and competitiveness,

enabling it to become a significant economic partner, in the Indo-Pacific region.

The writer is a former High Commissioner to Pakistan

Home

New Wage Code will reduce litigations under various labour laws: Experts

(Source: Hitvada, August 22, 2019)

THE Union Cabinet on July 26, 2019 approved the New Wage Code Bill, which would

ensure a minimum wage across all sectors by integrating four labour related laws. To

hear the same from eminent panelists, a panel discussion was organised by VIA-HRD

Forum at VIA auditorium recently. Advocate R B Puranik, of Bombay High Court said,

“There are no major changes in the New Wage Code Bill. The Bill may be good on

workers front and may not be good on employer part because in this highly competitive

business world, irrespective of the sector and size, every business is volatile, uncertain,

complex and ambiguous.

The cost of inputs is increasing year-on year whereas the output including attitude,

discipline, skill level, workers loyalty, customer loyalty is decreasing because of various

reasons. This may affect employment, labour turnover on account of downsize,

reduction in manpower, curtailment of manpower costs and other factors”. Sanjay Deo,

Management Consultant said, “Some of the intellectuals from industry are worrying that

this will not promote the ease of doing business. People will close their businesses.

Further, though the prime focus of the Bill is ‘mandatory national minimum wage’ and

the States cannot pay wages below to the mandatory national minimum wage. There is

no guarantee that Central Government will fix the national minimum wage

significantly”. He further said that the employers must settle the full and final payment

within couple of days as per law.

Nishikant Bhore, VP-HR, Indorama said, “The New Wage Code universalises the

provisions of the minimum wages and timely payment of wages to all employees

irrespective of the sector and wage ceiling. Currently there are more than 2,000 rates of

minimums wages prevailing in India. Introduction of Wage Code Bill will rationalise

and reduce the number of minimum wages. Advocate S D Thakur of Bombay High Court

said, “It is one of four codes envisaged by the Government which will subsume 44 labour

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15 CITI-NEWS LETTER

laws with certain amendments. Currently, the provisions of both Minimum Wages Act

and Payment of Wages Act apply on workers below a particular wage ceiling working in

Scheduled employments only. Introduction of New Wage Code will bring more clarity

on the definition of ‘Wage’ and reduce litigations under labour laws”.

Assisstant Labour Commissioner Ujwal Loya said, “Employers need not maintain

number of registers/ records/ forms but can maintain/ file the consolidated

templates/records electronically. Because of introduction of web-based inspection, there

will be accountability and transparency in enforcing the labour laws. The penalties on

employers against non-compliance is also significantly high”. “The Code envisages the

States to notify payment of wages to the workers through digital mode. No doubt that

this will improve the ease of doing business and attract investment for spurring growth

and more particularly simplification, uniformity in various labour laws. It also mandates

the minimum wages to be revised every 5-years,” he further stated in the programme.

Earlier, Hemant Lodha, Chairman of VIA-HRD Forum said, “The New Wage Code will

enhance the relationship between employees and employers in general and overall

earning status of employees.

This will also be helpful to industries to forecast their business plans in a smooth way”.

Floral welcome of panelists was performed by Nishikant Bhore,VP-HR, Indorama. Adv

R B Puranik was welcomed by Hemant Lodha. Ujwal Loya, Asstt Labour Commissioner,

Nagpur was welcomed by Pravin Tapadia, Past President of VIA. Adv S D Thakur and

Sanjay Deo, Management Consultant were greeted by Suresh Pandilwar. Suresh

Pandilwar, Co-Chairman of VIA-HRD Forum moderated the session. In the beginning,

he appraised the current labour law scenario of India and how the New Wage Code Bill

2019 evolved. More than 90 participants attended the programme including HR & IR

professionals, industrialists, entrepreneurs and students.

Prashant Mohota, former Vice-President of VIA, Amar Mohile from Zim Lab, Suchita

from Bilt Graphic Paper Products, Arun Pandit from Pee Vee Textiles, Haldiram Foods,

Sri Bhagirath Textiles, Ankur Pulps & Boards Ltd, R C Plasto, Sandeep Metalcrafts, KEC

International; Diffusion Engineers and SMS Group were prominently present.

Home

Pakistan allows partial trade via Attari ICP

(Source: Times of India, August 22, 2019)

Under pressure from its business community, the Pakistan government has allowed

partial import of goods from India. But at the same time, the neighbouring country has

launched a campaign to prevent Indian goods from reaching its markets via third

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16 CITI-NEWS LETTER

country. Highly-placed sources said the Pakistan’s ministry of commerce and textile had

issued a notification saying that shipments, which had been issued letter of credit (LC)

or bill of landing (BL) prior to August 9, could be traded and would remain unaffected

by announcement of border trade suspension following the scraping of special status for

Jammu and Kashmir (J&K) under Article 370.

Sources said the notification of Pakistan ministry mentioned that importers and

exporters had been approaching the ministry regarding scope of trade and fate of

shipments in the pipeline.

Following the decision, a truck load of goods had left for Pakistan through the

Integrated Check Post (ICP) at Attari on Tuesday, but was returned owing to some

technical issue. Notably, a day after Lok Sabha had okayed the scrapping of special

status given to J&K, Pakistan had retaliated with suspension of bilateral trade,

downgrading of diplomatic relations and other measures, including expelling Indian

high commissioner and calling back Pakistani envoy. Sources said in view of the high

demand of Indian goods, the Pakistan government had showed concern that suspension

of bilateral trade with India could result in increase in import of Indian goods by

misdeclaration via third countries or smuggling under the Afghan-Pakistan Transit

Trade Agreement (APTTA). In the notification, the Pakistan’s commerce and textile

ministry has urged the Pakistan’s Federal Board of Revenue to take necessary

enforcement measures to prevent misdeclaration and smuggling of Indian goods into

the country. It has also asked the board to initiate a campaign to confiscate Indian goods

that may be available and traded in Pakistani markets.

However, India-Afghanistan trade being carried under APTTA has remained unaffected

as goods from Afghanistan continued to arrive at the ICP, Attari.

Home

Amit Aggarwal showcases collection made from R|Elan fabric

(Source: Fibre2Fashion, August 22, 2019)

Day One at Lakmé Fashion Week (LFW) Winter/Festive 2019 ended with an exciting

high-tech fashion presentation of couturier Amit Aggarwal’s 'Flux' collection, made from

R|Elan FreeFlow fabric by Reliance Industries Limited (RIL). FreeFlow is part of the

unique range offered by R|Elan Fabric 2.0, which defines the next generation of textiles.

Drawing upon its extensive R&D and vast expertise in fibre technologies, RIL has

created the FreeFlow range of sustainable, performance enhancement Fabric 2.0 – a

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17 CITI-NEWS LETTER

portfolio of specially engineered fabric innovations that offer a plethora of benefits

ranging from sustainability, high performance to aesthetics. With high fashion brands

choosing R|Elan for designing eco-fashion, activewear, denim, ethnic and western-wear,

casuals and work wear, the brand is on its way to becoming a top fashion favourite, said

RIL in a press release.

The 'Flux' collection is Amit Aggarwal's perfect luxury men's and women's wear offering.

On his association with R|Elan, designer Amit Aggarwal said, R|Elan is making India

into a homegrown space for new age and contemporary textiles. "Working with the

natural fluidity of the R|Elan FreeFlow fabric, paved the way to create the new, modern

and fashionable 'Flux' collection. The fabric not only enhances the aesthetics of the

design through its elegant, fluid drapes but also sparks creative explorations for

beautiful, feminine silhouettes," said Aggarwal.

"Amit Aggarwal's Flux has unveiled the fusion of supreme craftsmanship, aesthetics

with the sustainability and high-performance quotient of R|Elan. We are pleased to see

novel high-tech apparels bringing out the unique features of R|Elan FreeFlow fabric,"

said Hemant D Sharma, head – polyester business, RIL.

Being a forerunner in reusing materials, the brand Amit Aggarwal has strived to find

new life in ‘discard’ with each of his collections. As India becomes the first nation to

recycle 90 per cent of its PET waste, the brand has joined hands with RIL's R|Elan to be

a part of this far-reaching movement. Very noticeable were Amit's distinct signature

recycled polymer strips on the ramp along with the geometric compositions in the form

of sheer sultry wraps, exaggerated sleeve detailing, strong power shoulders and some

feminine billowing skirts.

Bringing in his expert design techniques, Amit had plissé (a near constant for the

creations for men and women) dramatic fine draping and 3D embroidery, which added

to the extreme construction of the ensembles.

Colours were a rich sachet of bright emerald, petrol, purple and plum, which were

impressively balanced with gold, blush, silver and ivory.

Women's wear was opulent with polymer strips for long-sleeved mini, sheer skirt over

body suit, pleated long gown and draped neo sari. The ombré blazer over a draped skirt,

shimmering peplum blouse, grey midi dress and the red plisséd halter maxi were

stunners on the ramp. The draped sari and another shimmering plain/striped sari, as

well as the mini with impressive shoulder trails created a futuristic look for women.

Men's wear was as adventurous and matched the polymer strip detailing also seen on

battle jackets, plisséd one-sleeve shirt, boxy oversized trench coat and waist coat with

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18 CITI-NEWS LETTER

shirt. Stopping the show was the very graceful and elegant Lisa Haydon who sashayed

down the ramp in a purple draped sari gown with micro plissé pallav and high slit skirt.

Keeping her dashing company on the ramp was ace cricketer Hardik Pandya who

strutted down in a matching purple neo style, long-line, jacket teamed with narrow

pants and shimmering flap detailing.

R|Elan, the next-gen fabrics have been created from specially engineered fibres and

yarns using the cutting-edge technological expertise, state-of-the-art R&D and the

robust testing systems. These smart fabrics have been designed to enhance comfort and

aesthetics and it is the most sought-after fabric by renowned domestic and global

brands, retailers and apparel manufacturers.

Home

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19 CITI-NEWS LETTER

GLOBAL

US-China trade war uncertainty could cost $585 bn by 2021

(Source: Fibre2Fashion, August 22, 2019)

Uncertainty arising out of the US-China trade conflict could lower world gross domestic

product (GDP) by 0.6 per cent in 2021, relative to a no-trade-war scenario, according to

Bloomberg Economics. That is double the direct impact of the tariffs and the equivalent

of $585 billion off the International Monetary Fund’s estimated 2021 world GDP of $97

trillion. The Bloomberg Economics report was drafted by Dan Hanson, Jamie Rush and

Tom Orlik.

The analysis showed China would be hit harder by the uncertainty factor, with its GDP

lower by 1 per cent compared with a 0.6 per cent chunk taken out of the economic

output of the United States, the news agency reported.

A survey released last week by the Federal Reserve Bank of New York found a growing

conviction among businesses that tariffs were hitting their bottom line. The Fed

responded to economic headwinds with a rate cut of 0.25 per cent last month.

The Bloomberg Economics report said that while monetary policy can be used to

mitigate uncertainty shocks, it cannot prevent the damage entirely. If central banks

respond to demand weakness, world GDP will be 0.3 per cent lower in 2021 than it

would be in a no-trade-war scenario.

Home

Indonesian textile companies take hit as China shifts focus to SEA

(Source: SBR, August 22, 2019)

Fiercer competition looms as the influx of Chinese goods may depress prices.

Textile companies in Indonesia might be

hit by depression in prices as Chinese

companies redirect their textile products

to Southeast Asia in light of heightened

tensions with the US, Moody’s Investors

Services reported.

The US hiked tariffs on China to 25% from

10% in May, which could prompt Chinese

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20 CITI-NEWS LETTER

companies to dump goods in Southeast Asia. Indonesia is considered a more favorable

destination for Chinese textile products given its tariffs of 10-15%.

Homegrown textile firms Sri Rejeki Isman Tbk (Sritex) and Pan Brothers Tbk may need

to brace for fiercer competition from cheaper Chinese goods, although the two are

expected to maintain stable credit profiles within the next year as they rely more heavily

on exports than on domestic sales and have longstanding relationships with their

customers and value-added products that cannot be easily replaced by imported

manufactures.

The two players export around 60% of its products, and have other business divisions

catering to the fashion as well as military and corporate uniform businesses on a made-

to-order basis. It has also been supplying uniforms to the military and police since 1990.

Sritex’ domestic spinning sales, which contributed around 20% to total revenue, could

be most exposed to competition as it can most easily replaced by Chinese goods and its

sales to textile manufacturers, wholesalers and traders are not bound by long-term

contracts.

Meanwhile, Pan Brothers gets 96% of revenue solely from exports. For the 12 months

ended 30 June 2019, 57% of the company's sales were distributed to its customers' retail

locations within Asia, 26% to the US and 15% to Europe.

Pan Brothers’ top five customers account for 46% of total sales, with its largest customer

Uniqlo making up around 28% of total sales.

Home

Made in Vietnam: Draft Regulations on Rules of Origin

(Source: Pritesh Samuel, Vietnam Briefing, August 22, 2019)

Vietnam’s Ministry of Industry and Trade (MOIT) recently released draft regulation –

Decree No. 31/2018/ ND-CP – on labeling criteria for domestically consumed goods.

The draft and subsequent media reports have caused many in Vietnam’s foreign

investment community to question how the regulation will impact their business.

In particular, many importers who manufacture in Vietnam and export to other

countries are concerned about how the new regulation will impact their business

operations. However, the new regulation will only affect goods produced for the

Vietnamese market.

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21 CITI-NEWS LETTER

The Nikkei Asian Review reported that the draft regulations specify that goods must

have a localization ratio of at least 30 percent to be designated as Vietnamese made.

This will primarily impact companies that produce a product in multiple countries for

sale in the Vietnamese market. These companies must now source 30 percent of their

value of input locally to be recognized as Vietnamese in origin and apply the appropriate

Harmonized Commodity (HS) code to qualify.

Which products are affected by the draft regulation?

Dezan Shira & Associates Business Intelligence Manager Maxfield Brown has advised

many foreign-invested manufacturers on rules of origin in Vietnam and more recently

on the Decree No. 31/2018/ ND-CP draft regulation. Brown summarizes the scope of the

regulation as follows:

Production inputs imports from China are not impacted as these goods are

subject to rules under the ASEAN – China Free Trade Agreement;

Finished products exports to the US are not impacted as these goods are subject

to US customs regulations;

Goods manufactured in Vietnam and sold in Vietnam will be impacted by the 30

percent local sourcing requirement.

If the regulations comes into effect, the 30 percent input requirement will not be a

problem for labor-intensive industries, such as textiles and garments, which are able to

source locally.

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22 CITI-NEWS LETTER

However, industries that use less labor and source a significant amount of raw material

from abroad may have a re-think of their business plans.

It is also important to note that the regulation affects goods produced for the

Vietnamese market and not applicable for exports to international markets that are

dictated by specific free trade and bilateral agreements.

Why is there a new focus on Made in Vietnam?

The new draft regulations follow a government investigation into Vietnamese electronics

manufacturer Asanzo, which was reported to be importing Chinese products and selling

them as Asanzo- or Vietnam-made. Reports stated that Asanzo would only assemble

electronic products – such as televisions – at its factory using most or all components

from China.

However, on closer look, Asanzo may not have done anything wrong.

Vietnam lacks clear regulations on the labeling of goods as made in Vietnam. Decree

43 tells a manufacturer how to label products in Vietnam and import products, but the

regulation does not stipulate the criteria that products must meet to be labeled as made

in Vietnam.

Further current regulations do not specify the percentage of locally made content to

qualify as made in Vietnam. Due to such vague regulations, manufacturers often have to

decide whether to label goods as made in Vietnam or not.

Current regulations state that the origin of goods is defined as the country where the

goods are wholly produced or where substantial processing is done in case there are

several countries involved in producing the certain product. Manufacturers can use

domestic law or bilateral agreements to determine labeling requirements.

For example, in Asanzo’s case, products that do not originate from Vietnam cannot be

labeled as Vietnamese made under the ASEAN-China FTA. However, as per World

Trade Organization(WTO) regulations effective for both Vietnam and China, Asanzo did

nothing wrong, as the last stage of production took place in Vietnam, while inputs were

sourced from China.

Vietnam Law Magazine reported that Au Anh Tuan, Head of the Customs Control at

the General Department of Customs, said, “we have adopted the rules of origin

applicable to exports, but none for goods sold in the domestic market.”

The draft regulation is currently open to the public for comment.

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23 CITI-NEWS LETTER

Some media reports have speculated that the draft is partly a response to US pressure

for scrutiny of Chinese products in Vietnam. However, this new regulation does not take

aim at companies that may be seeking to evade US tariffs on China.

Ultimately, the Vietnamese government wants to protect consumer’s interests. The draft

regulation will help clarify what products qualify as made in Vietnam.

One way it could do this is by using Apple’s example of imprinting the back of its

iPhones with “Designed by Apple in California, Assembled in China.” This gives the

consumer a clearer picture of where the product is coming from.

Home

Vietnam’s exports keep rising this year

(Source: Nhan Dhan Online, August 22, 2019)

With an expected decrease in electronics exports, Vietnam is projected to still secure its

export goal this year on account of an increase in export of traditional items such as

textiles and agricultural products.

Spain-based FocusEconomics, which provides in-depth economic analysis globally, just

released its fresh forecast for Vietnam’s economic prospects, stating that the Vietnamese

economy will expand 6.7% in 2019.

“The economy will be one of the region’s star performers this year, buttressed by strong

tourism, exports and industrial output,” the firm stated in a report.

Last week, Standard Chartered Bank also released its freshest projections that Vietnam

will “remain the fastest-growing ASEAN economy in the near term, with 2019 growth

being projected at 6.9%.”

One of the key drivers of the high economic growth will be high exports.

According to the bank, the country’s export growth is expected to remain steady and

outperform peers. Electronics exports, which make up about a third of the total, are

likely to be less supportive than in recent years due to a reduction in external demand

and lower semiconductor prices. However, improving traditional exports – textiles and

agriculture – should continue to take up some of the slack.

The Ministry of Industry and Trade (MoIT) reported that in 2019, Vietnam’s exports will

be affected by contracted production and exports of the electronics industry led by the

Republic of Korea (RoK)’s Samsungand LG.

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24 CITI-NEWS LETTER

Samsung’s business and production activities have shown signs of slowing down due to

the group’s reduced business results globally. This has underminedthe group’s

production and export of mobile phones and their spare parts in Vietnam.

An MoIT report on Vietnam’s seven-month tradereleased two weeks ago cited Samsung

Electronics based in RoK reporting that the group’s profit in the second quarter of 2019

decreased by over 50% on-year due to negative impacts of the US-China trade warwhich

caused a reduction in the global demand for electronics chips and mobile phones.

“Samsung is expected to reduce its annual profit in the third quarter of 2019 due to

slashed prices of chips caused by oversupply and the US’ sanction on China’s

telecommunications manufacturer Huawei Technologies, one of Samsung’s most

important customers,” the report stated.

In July this year, Vietnam raked in US$3.8 billion from shipping mobile phones and

their spare parts, down 1.9% as compared to the same period of last year, when the

figure reached US$3.5 billion, a 5.4% rise from the corresponding period of 2018.

In the first seven months of this year, Vietnam earned about US$27.3 billion from

exporting mobile phones and their spare parts, up 3.1% on-year, and accounting for

18.8% of the nation’s total export turnover. In the first seven months of 2018, the figure

touched US$26.1 billion, a 15.8% climb on-year. Last year, Samsung Vietnam’s export

turnover totalled over US$60 billion, taking up 25% of the country’s total.

At present the 2019 production and business plans of Samsung and LG in Vietnam are

still ensured. However, in the long term, if Samsung and LG in South Korea do not have

sufficient materials for production as planned, their production of semiconductors,

chips and screens will decrease. As a result, this will likely influence the spare part

supplies for their production and assembly of phones and TV in Vietnam. This would

mean the country’s output and exports of electronics will be negatively affected.

An expected reduction in electronics exports is believed by the MoIT to be one of the key

obstacles for Vietnam to reach its export goal of US$262 billion this year, up 7.5% on-

year.

Under the impact of reduced growth in electronics exports, Vietnam’s average monthly

export turnover reached US$20.73 billion in the first seven months of 2019.

“Thus, it will be a very big challenge to hit an average monthly export turnover of

US$23.57 billion for the remaining five months of this year, in the context of the global

market’s uncertainties,” stated the MoIT report.

In the first seven months of 2019, the total export turnover was estimated to be

US$145.13 billion, up 7.5% on-year, but US$1 billion lower than the MoIT’s initial

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25 CITI-NEWS LETTER

expectation. The import turnover was estimated to hit US$143.34 billion, up 8.3% on-

year. This resulted in a US$1.8 billion in trade surplus.

Key pillars

The MoIT expect there will be a rise in exportation oftraditional items to keep and even

exceed its export turnover target for 2019.

According to the MoIT, during the remaining months of 2019, Vietnam’s exports are

projected to continue keeping its current growth speed with key drivers being traditional

staple exports, such as textile and garment, footwear, and wood products.

In the first seven months of this year, Vietnam earned US$10.4 billion from exporting

footwear products, up 13.8% on-year. The footwear sector expect that the figure will be

US$21.5 billion for 2019.

Meanwhile, the export turnover of textiles and garments hit US$18.3 billion in the first

seven months of 2019, a10.5% increase from the same period last year. It is forecasted

that the figure will be around US$40 billion this year, up from US$36 billion in 2018.

Nguyen Viet Thang, head of Technical Division under the X26 JSC, told VIR that after

the company reaped VND580 billion (US$25.22 million) last year from exporting

garments and textile, footwear, and wood products, the company is expected to earn

VND600-650 billion (US$26-28.26 million) from exporting these products this year.

In the first seven months of 2019, the figure was about VND420 billion (US$18.26

million), up 10% on-year.

“The world’s demand for these products keep rising, benefiting exporters like our

companies. Besides, Vietnam’s business climate has been significantly improved,

making it more favourable for enterprises to perform and boost exports,” Thang said.

Nguyen Ton Quyen, vice chairman of the Timber and Forest Product Association of

Vietnam, said that many foreign firms currently want to co-operate with domestic

enterprises to swell exports to their home markets.

A slew of foreign enterprises are exporting significant volumes of wood. For example,

Nam Dinh Export Foodstuff and Agricultural Products Processing JSC’s export turnover

is forecasted to climb from US$50 million in 2018 to about US$55 million this year.

Meanwhile, many other businesses such as Dai Thanh, Hiep Long, Tien Dat, Cancia

Pacific, Phu Tai, and Minh Phat are also expected to rake in an export turnover of

US$30-50 million for 2019, up 15% on-year.

“The wood industry’s export turnover has been rising strongly over the past few years

from US$7 billion in 2016 to US$7.66 billion in 2017 and US$8.48 billion last year. The

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26 CITI-NEWS LETTER

figure is projected to be US$11 billion this year,” Quyen said.

Last year, Vietnam’s wood export turnover strongly increased from many markets, such

as France (25.5%), Japan (16%), Malaysia (100%), South Korea (48%), and the US

(17.5%).

According to the MoIT, in the time to come, many types of export items from Vietnam

will likely replace Chinese ones in the US market, perhaps because of the ongoing US-

China trade-war. Especially textiles and garments.

Together with this, there has been an investment shift from China to neighbouring

markets including Vietnam. This has led to a rise in foreign direct investment (FDI) in

Vietnam in the first seven months of 2019, laying a firm foundation for Vietnam to boost

its production and exports in this year and beyond.

The Ministry of Planning and Investment reported that in the first seven months of

2019, FDI disbursement for the January – July 20 period reached US$10.6 billion, up

7.1% on-year.

Meanwhile, Standard Chartered Bank also projected that FDI inflows into Vietnam will

stay robust this year, particularly in the manufacturing sector, totaling US$18 billion.

The sector will also become home to the country’s exports that will considerably

contributed to high economic growth this year.

“Vietnam’s growth prospect remains strong, with macro-economic conditions staying

stable in the first half of the year which is likely to continue towards year-end. We expect

growth to accelerate mildly in the second half of 2019 from 6.7% in the first six months

of the year,” said Chidu Narayanan, economist for Asia of Standard Chartered Bank.

Home

Finding Partners Along the Supply-Chain at Sourcing at MAGIC

(Source: Dorothy Crouch, Apparel News, August 22, 2019)

As the major Las Vegas supply-chain show for apparel brands and designers, Sourcing

at MAGIC ran at the Las Vegas Convention Center Aug. 11–14. Bringing together

companies that provide apparel manufacturing, textiles, technology and services with

the businesses that need these partners, options were available from around the globe to

fulfill these needs.

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27 CITI-NEWS LETTER

At the booth for Eclat Textile Co., Ltd., Stefan Novak, who manages global sales and

marketing for textiles and full garment packaging mentioned that brands were looking

for an option other than China.

“They are looking out. Eclat is offshore in Vietnam, where we’ve been set up

with Lululemon and Nike for seven or eight years,” he said. “I don’t think a lot of

people are looking toward China as a big player anymore.”

For the Brea, Calif., factory AST Sportswear, Inc., maker of the Bayside label,

workingquickly to meet customer demand was how the company was bringing in

business. Nadir Zulfiqar, who manages strategic accounts and brand development, was

promoting his company’s ability to manufacture pieces quickly within the United States.

“When you go overseas, you are looking at 90 to 120 days, and our minimums are

lower,” he said. “We saw a lot of online retailers this time and military people who are

starting businesses.”

One of these new, emerging online businesses is District 85, an e-commerce brand

that sells pieces that transition easily from office to after-work engagements. Founder

Dominique Jones sees her clientele as professional women ages 25 to 40. Ahead of her

December launch, she was looking for supply-chain partners to create quality blazers

and pump-style footwear for every size woman.

“When it comes to blazers, I like a range of colors and patterns—from black to gray or

polka dots, flowers and animal prints. It’s something you can dress up or down,” she

explained. “I want something that can speak to every woman, whether she is more

conservative and wants the solid power colors or is more fun and freer and prefers to do

something funky with prints.”

Home

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