India as a Textiles Sourcing Destination- Nov 2017

India as a Textiles Sourcing Destination

1. Dragon Sourcing Your Tailored Approach to Emerging Markets Textiles Sourcing Study in India November, 2017 www.dragonsourcing.com
2. Table of Contents  Executive Summary  Top Export Categories  Indian Economy Overview  Precious Metals  Mineral Fuels  Automobiles  Industrial Machinery  Pharmaceutical Products  Organic Chemicals  Apparels & Products (Not Knitted/Woven)  Electrical, Electronic Equipment  Apparels & Products (Knitted/Non­Woven)  Cotton  Cereals  Iron & Steel Products  Iron & Steel  Plastics & Plastic Products  Made­up Textile Products  Dragon Sourcing – India  Disclaimer © 2017 Dragon Sourcing. All rights reserved. 2 www.dragonsourcing.com
3. How Export of Textile Categories Stack Against Top Indian Exports 2015 Category Export Value in USD HS Code Billion Precious Metals 38.49 HS 71 Top Products Diamonds Jewelry articles Gold 2015 Export Value in USD Billion 21.87 9.99 5.31 Mineral Fuels 31.39 HS 27 Petroleum oil 30.45 Cars 5.39 Automobile 14.08 HS 87 Motor Vehicle Accessories 3.89 Motorcycles, side­cars 1.78 Industrial Machinery 13.23 HS 84 Tap, cock, valve for pipe, tank 1.16 Pharmaceuti cal Products 12.54 HS 30 Medicament mixtures 11.24 Heterocyclic compound 1.58 Organic Chemicals 11.30 HS 29 Cyclic hydrocarbons 1.34 Apparel & Women's suits, jackets, dresses skirts etc. &shorts 2.69 Products 9.35 HS 62 Women's blouses & shirts 1.63 (Woven) Men's suits, jackets, trousers etc. & shorts 1.19 ©eEe2qlle0eucc1iptt7rrmoicDneainrcl,at gon7.S94ourcHinSg8.5AlEl lreEigclehtrictnicstcrialrcecptucspraorerfnnorlvsvirnfeeloeirdnrtmese. yretsert,leesmptahtoicny, 1.16 0.79 CAGR of Exports Value (2011­ 2015) ­6.34% ­13.68% 8.18% 5.32% 11.01% 0.34% 4.18% ­9.33% India’s share of Global Exports Top Export Destinations Import Duty into Import Duty into US EU Export Duty (2015) 6.37% USA, Hong Kong, USA, Belgium, Israel Free­13.5% Free­2.5% (Silver Export permission (Silver clad with clad with is required if the precious metal) precious metal SCOMET items 1.69% UAE, Singapore, USA, Saudi Arabia, Kenya Free ­ 84¢/bbl (Wastes of lubricating oils and greases) Export subject to Free ­3.5%(Waste oils) NOC from Ministry of Petroleum and Natural Gas 1.07% USA, Mexico, Sri Lanka, Turkey South Africa, Free­25%(Motor vehicles for goods transportation) 16% (Road tractors for semi­ trailers) Export permission is required if the SCOMET items 0.69% USA, UAE, UK, Germany, China Free – 6.7% (Steam turbines) 4.20% (Marine Export permission propulsion is required if the engines) SCOMET items Export allowed subject to 2.53% USA, South Africa, UK, Nigeria, Russia Free ­ 5% (Gel preparations) 6.5%(Urea) obtaining No Objection Certificate from DGHS NOC from 5.5% Department of 3.07% USA, China, Germany, Netherlands, Japan Free ­ 6.5% (Chloromethane Chemicals&Petro (Oleic, linoleic or (methyl chloride) chemicals, linolenic acids) and chloroethane Ministry of (ethyl chloride)) Chemicals&Fertili zers 4.15% USA, UAE, UK, Germany, Spain Free ­ 41.9% (Suit­type jackets 12%(Hand­made Exports permitted & blazrs ­ trousers ponchos) under licence worsted wool) 0.34% USA, UAE, UK, Germany, France 3 Free ­ 1.3% (Transmission apparatus) 4.7% (Motors of Export permission an output not is required if the exceedinwgw3w7,.5dWra)goSnCsOoMurEcTinigte.cmosm
4. How Export of Textile Categories Stack Against Top Indian Exports Category Apparel & Products (Non­ Woven) 2015 Export Value in USD HS Code Billion 7.78 HS 61 Top Products T­shirts, singlets and other vests 2015 Export Value in USD Billion CAGR of Exports Value (2011­ 2015) India’s share of Global Exports (2015) 2.86 7.59% 3.47% Cotton 7.47 HS 52 Cotton yarn 3.74 ­1.06% 13.44% Cereals 6.85 HS 10 Iron & Steel Products 6.51 HS 73 Iron & Steel 6.30 HS 72 Rice Cast Products Structures (rods, angle, plates) Ferro­alloys Flat­rolled products 6.38 6.26% 6.75% 1.02 0.99 0.04% 2.32% 1.31 1.29 ­5.55% 1.95% Plastic Products 5.01 HS 39 Polymers of propylene 0.77 ­2.14% 0.91% Other Furnishing articles 1.65 Apparel & Products (Woven) 4.62 HS 63 Bed, table, toilet and kitchen linens 1.43 4.65% 7.61% Top Export Destinations Import Duty into Import Duty into US EU Export Duty USA, UAE, UK, Germany, France China, Bangladesh, Pakistan, Vietnam, Sri Lanka Saudi Arabia, Iran, UAE, Iraq, Bangladesh USA, UAE, Germany, Saudi Arabia, UK USA, Iran, Italy, UAE, Nepal USA, China, UAE, Turkey, Italy USA, UK, Germany, UAE, Australia Free ­ 28.2% 12%(Overcoats, (Overcoats, car coats, capes, Exports permitted carcoats, capes, cloaks and similar under licence cloaks, anoraks) articles) Free ­ 16.5% (woven fabrics of cotton) 4% (Cotton Sewing Thread) Prior registration of contracts with DGFT Free ­ 1.8¢/kg (Rice) 12.8% (Seed of wheat and meslin, for sowing) Free Free ­ 12.5% (Screws, bolts, nuts, coach screws) 2.7% (Switch blades, crossing Export permission frogs, point rods is required if the and other SCOMET items crossing pieces) Free ­ 10% (Ferrosilicon chromium) 7% (Ferro­ chromium) Export permission is required if the SCOMET items Free ­ 6.5% No export (Fasteners, in permission is clips suitable for 6.5% (Polymers required for use in a of ethylene) supply of mechanical SCOMET items attaching device) from DTA to SEZ Free ­ 20.9% 12% (Blankets (Cotton printed and travelling Exports permitted bed linen, not rugs, of wool or of under licence napped) fine animal hair) Textile categories are some of the largest export categories from India, making a combined export value of USD 29.2 Billion in 2015 © 2017 Dragon Sourcing. All rights reserved. 4 www.dragonsourcing.com
5. Apparels & Products (Not Knitted/Woven) (1/2) World Export of HS 62 series (Apparel & Products (Woven)) in USD billion in 2015 97 ; 43% 79 ; 35% 15 ; 7% 9 ; 41%2 ; 51%3 ; 6% China Bangladesh Vietnam Italy India Rest of World Category Apparels & Products (Woven) Export Value Percentage Share USD 9.35 billion 100% Women's suits, jackets, dresses skirts etc. &shorts USD 2.7 billion 28.7% Women's blouses & shirts USD 1.6 billion 17.5% Men's suits, jackets, trousers etc. & shorts USD 1.2 billion 12.8% Export of HS 62 series (Apparel & Products (Woven)) from India in USD billion 10.00 9.00 7.94 8.74 9.06 9.35 8.00 7.43 7.00 6.00 5.00 4.00 3.00 2.00 1.00 - 2011 2012 2013 2014 2015 Top Importers of HS 62 series (Apparel & Products (Woven)) from India in USD billion 2.5 2.0 1.5 1.0 0.5 - USA UAE UK Germany Spain 2011 2012 2013 2014 2015 © 2017 Dragon Sourcing. All rights reserved. 5 www.dragonsourcing.com
6. Apparels & Products (Not Knitted/Woven) (2/2) Characteristics Industry Structure India’s % share in Global Exports (2015) India’s % share in total exports from India(2015) CAGR of Exports (2011­ 2015) Imports (2015) Import duty into US Import duty into EU Road Ahead India’s Position The Indian textiles industry is extremely varied, with the hand­spun and hand­woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. 4.15% 3.5% 4.18% USD 0.314 billion Free ­ 41.9%(Suit­type jackets & blazrs ­ trousers worsted wool) 12%(Hand­made ponchos) The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth USD 1.85 billion during April 2000 to March 2016. Gujarat Maharashtra Karnataka Tamil Nadu Bihar West Bengal  The Department of Handlooms and Textiles, Government of India, has tied up with nine e­commerce players and 70 retailers to increase the reach of handlooms products in the Indian market, which will generate better prices and continuous business, besides facilitating direct access to markets and consumers for weavers.  The organized apparel segment is expected to grow at a Compound Annual Growth Rate (CAGR) of more than 13 per cent over a 10­year period. Source: ibef.org, International Trade Centre © 2017 Dragon Sourcing. All rights reserved. 6 www.dragonsourcing.com
7. Apparels & Products (Knitted/Non­Woven) (1/2) World Export of HS 61 series (Apparel & Products (Non-Woven)) in USD billion in 2015 98 ; 43% 84 ; 37% 8 ; 3% 15 ; 7% 9 ; 41%1 ; 5% China Bangladesh Vietnam Hong Kong, China India Rest of World Category Apparels & Products (Non­ Woven) Export Value Percentage Share USD 7.78 billion 100% T­shirts, singlets and other vests USD 2.9 billion 36.7% Men's shirts USD 0.8 billion 9.7% Women's suits, dresses, skirt etc. & short USD 0.7 billion 9.5% Export of HS 61 series (Apparel & Products (Non-Woven)) from India in USD billion 9.00 8.00 7.48 7.78 6.96 7.00 6.00 5.81 5.47 5.00 4.00 3.00 2.00 1.00 - 2011 2012 2013 2014 2015 Top Importers of HS 61 series (Apparel & Products (Non-Woven)) from India in USD billion 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 - USA UAE UK Germany France © 2017 Dragon Sourcing. All rights reserved. 7 www.dragonsourcing.com
8. Apparels & Products (Knitted/Non­Woven) (2/2) Characteristics Industry Structure India’s % share in Global Exports (2015) India’s % share in total exports from India(2015) CAGR of Exports (2011­ 2015) Imports (2015) Import duty into US Import duty into EU Road Ahead India’s Position The decentralized power looms/ hosiery and knitting sector form the largest component of the textiles sector. 3.47% 2.9% Gujarat 7.59% USD 0.246 billion Free ­ 28.2%(Men's/Women’s or boys‘/girls’ overcoats, carcoats, capes, cloaks, anoraks) 12%(Overcoats, car coats, capes, cloaks and similar articles) The technical textile industry is expected to expand at a CAGR of 9.6 per cent during FY14–23 to USD32 billion in FY23. The targeted market size would be achieved by targeting non­woven technical textiles. Maharashtra Karnataka Tamil Nadu Bihar West Bengal  The domestic textile and apparel industry in India is estimated to reach USD141 billion by 2021 and USD100 billion by 2017 from USD67 billion in 2014.  Total cloth production in India is expected to grow to 112 billion square metres by FY17 from 64.3 billion square metres in FY15.  Healthcare and infrastructure sectors are major drivers of the technical textile industry Source: ibef.org, International Trade Centre © 2017 Dragon Sourcing. All rights reserved. 8 www.dragonsourcing.com
9. Cotton (1/2) World Export of HS 52 series (Cotton) in USD billion in 2015 20 ; 36% 16 ; 28% 2 ; 4% 4 ; 7% 6 ; 11% China India Pakistan Hong Kong, China 7 ; 13% USA Rest of World Category Cotton Export Value Percentage Share USD 7.47 billion 100% Cotton yarn (not sewing thread) 85% or more cotton, not retail Cotton, not carded or combed Woven cotton fabrics, 85% or more cotton, weight less than 200 g/m2 USD 3.7 billion USD 1.9 billion USD 1. 0 billion 50.0% 24.9% 13.6% Export of HS 52 series (Cotton) from India in USD billion 12.00 11.29 10.00 8.57 8.00 7.80 8.88 7.47 6.00 4.00 2.00 2011 2012 2013 2014 2015 Top Importers of HS 52 series (Cotton) from India in USD billion 5.0 4.0 3.0 2.0 1.0 China Bangladesh Pakistan Viet Nam Sri Lanka 2011 2012 2013 2014 2015 © 2017 Dragon Sourcing. All rights reserved. 9 www.dragonsourcing.com
10. Cotton (2/2) Characteristics India’s Position Industry Structure India is one of the largest producers as well as exporters of cotton yarn India’s % share in Global Exports (2015) India’s % share in total exports from India(2015) CAGR of Exports (2011­ 2015) Imports (2015) Import duty into US Import duty into EU 13.44% 2.8% (­)1.06% USD 0.601 billion Free ­ 16.5%(woven fabrics of cotton: Weighing not more than 200 g/m²:Unbleached (Containing 36% or more by weight of wool or fine animal hair) 4% (Cotton Sewing Thread) Punjab Haryana Rajasthan Gujarat Madhya Pradesh Maharashtra Andhra Pradesh Karnataka Tamil Nadu Road Ahead With various measures by Government of India under Technology Mission on Cotton, better availability of quality certified seeds and truthful label seeds, increased usage of Bt seeds and the changed mindset of cotton farmers towards improved farm practices by adopting new techniques like High density planting system, intercropping etc., the productivity of cotton in the country over the years had been continuously increasing.  The cotton cultivation in India in stands at 12.25 million hectares in the year (2014­15) against about 11.5 million hectares in year (2013­14).  Major importers of Indian textile: Various reputed foreign retailers and brands such as Carrefour, Gap, H&M, JC Penny, Levi Strauss, Macy's, Marks & Spencer, Metro Group, Nike, Reebok, Tommy Hilfiger and Wal­Mart Source: ibef.org, International Trade Centre, The Cotton Corporation of India Ltd., The Cotton Textiles Export Promotion Council © 2017 Dragon Sourcing. All rights reserved. 10 www.dragonsourcing.com
11. Made­up Textile Products (1/2) World Export of HS 63 series (Made-up Textile Products) in USD billion in 2015 20 ; 34% 2 ; 4% 27 ; 44% 3 ; 5% 4 ; 6% 5 ; 8% China India Pakistan Germany USA Rest of World Category Made­up Textile Products Export Value Percentage Share USD 4.62 billion 100% Furnishing articles USD 1.7 billion 35.7% Bed, table, toilet and kitchen linens Sacks and bags of a kind used for the packing of goods USD 1.4 billion USD 0.6 billion 30.9% 13.7% Export of HS 63 series (Made-up Textile Products) from India in USD billion 5.00 4.71 4.61 4.62 4.00 3.85 3.97 3.00 2.00 1.00 - 2011 2012 2013 2014 2015 Top Importers of HS 63 series (Made-up Textile Products) from India in USD billion 2.5 2.0 1.5 1.0 0.5 USA UK Germany UAE Australia 2011 2012 2013 2014 2015 © 2017 Dragon Sourcing. All rights reserved. 11 www.dragonsourcing.com
12. Made­up Textile Products (2/2) Characteristics Industry Structure India’s % share in Global Exports (2015) India’s % share in total exports from India(2015) CAGR of Exports (2011­ 2015) Imports (2015) India’s Position India is home for some of the world’s biggest producers in the segment like Welspun, Trident and Dicitex. Many Indian brands like Indian Drape, RR Décor, F & F, Maspar, Goldtex, ABN, Portico New York, Birla Century, Spread, Swayam, MYCK, Zyneand Super Net, etc. are recognized nationally and are growing at a healthy pace. A large number of international brands like Zimmer+Rhodes, Designers’ Guild, Esprit Home, Harlequin, United Colour of Benetton have experienced a 20­30% annual growth in the Indian market. 7.61% 1.7% 4.65% USD 0.555 billion New Delhi Rajasthan Gujarat Madhya Pradesh Maharashtra Karnataka Tamil Nadu West Bengal Import duty into US Free ­ 20.9% (Cotton printed bed linen, not napped) Import duty into EU 12% (Blankets and travelling rugs, of wool or of fine animal hair) Road Ahead With growing awareness towards environment, safety, hygiene and functionality, the demand for better quality home textiles with features like stain­resistance, flame retardant, fragrance, etc. is increasing.  India is globally recognized and appreciated for its wide variety and exquisite designs in home textiles & furnishing fabrics.  Made­ups constitutes about 12% of India’s textile exports, as on 2013­14. Bed linen is the major export product category and exports are growing with increasing quality & design capabilities of Indian manufacturers © 2017 Dragon Sourcing. All rights reserved. Source: ibef.org, International Trade Centre, hghindia.com 12 www.dragonsourcing.com
13. Dragon Sourcing Representative Office in India Dragon Sourcing’s Representative Office in India was established in 2008 with an objective to help clients create significant and sustainable value (cost, quality and service) in the procurement of their goods and services by leveraging the capabilities of India’s supply markets. Dragon Sourcing India office also covers other countries in the region such as Bangladesh, Thailand, Malaysia and Pakistan Dragon Sourcing’s aim is to develop long term relationship based on trust, full transparency and business integrity with a limited number of Western and American Corporations with Suppliers of Asian LCCs as Malaysia, Bangladesh, India which experience unprecedented and exponential economic growth, either:  To support your procurement departments to identify, qualify, select and manage on an on­going basis with LCC suppliers for export purposes  To support your procurement departments in LCC’s to implement world class sourcing practices for (1) your local needs, and (2) for your localization requirements Our ability to provide end­to­end service from strategy formulation through to procurement operations A business model which ensures that we work exclusively for the benefit of the buyer Total transparency and sharing of all information with the client Deep procurement process expertise combining operational and consulting skills allowing us to provide a high quality service across a wide range of categories An engineering and technical background combined with a deep understanding of industrial B2B buying practices and requirements © 2017 Dragon Sourcing. All rights reserved. 13 www.dragonsourcing.com
14. Sourcing at Dragon Sourcing Office in India Our clients are essentially large multi­nationals. We have done extensive sourcing work on textiles in India. We have also successfully sourced (or are in the process of sourcing) an extensive set of spend categories for these clients just to name a few, Examples of textile & apparels categories handle by India office. Towels • Beach towels, terry towels, others. Knitted Garments, • T­shirts, cotton trousers, work wear, Sweaters, Others. Woven Garments, • Shirts, Sport wear, swim wear, others. Denims, • Jeans, shirt, skirt, others. Others, • Kitchen Linen • Table Linen • Duvet covers. • Cotton Bags • Unger garments. • Socks © 2017 Dragon Sourcing. All rights reserved. 14 www.dragonsourcing.com
15. We can cover global emerging markets through our owned offices and our network of procurement sub­contractors Houston Mexico City Brussels London Paris Graz Riga Warsaw Prague Kiev Budapest Porto Rome Ljubljana Bucharest MadridMilan Istanbul Tel Aviv Cairo Dammam Lagos Addis Ababa Nairobi Novosibirsk Shanghai Myanmar Hong Kong Mumbai BangkoCkambodia Kuala Lumpur Ho Chi MiMnaCniitlya Jakarta Santiago Sao Paulo Rosario © 2017 Dragon Sourcing. All rights reserved. Johannesburg Melbourne Buying offices Sales offices Geographies covered by DS network of procurement subcontractors 15 www.dragonsourcing.com
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