OVERVIEW OF GLOBAL FASHION INDUSTRY

ANALYSE THE EXPORT IMPORT TREND OF INDIA AND UAE IN TEXTILE FOR THE LAST 5 YEARS

BY : AGARWAL MORYA THAKKAR SINGH

CONTENTS

World textile Background

Indian textile industry background

UAE trade background

UAE India bilateral relations

WORLD TEXTILE AND CLOTHING BACKGROUND :

Textile and garments sector occupies significant position in total volume of merchandise trade across countries. World trade in textiles and clothing amounts to US $ 400 billion and is growing constantly. Developing countries are the major exporters and they account for little over two-third of world exports in textiles and clothing. The global textile and clothing industry is one of those sectors that were integrated to the multilateral trading system in 2005. The integration has been possible with the removal of the Multi-Fibre Agreement (MFA) through the Agreement on Textile and Clothing (ATC). The Multi-Fibre Agreement (MFA), that governed the extent of textile trade between nations since 1974, expired on 1 January 2005. The MFA enabled developed nations, mainly USA, European Union and Canada to restrict imports from developing countries through a system of quotas.

INDIAN TEXTILE INDUSTRY BACKGROUND The apparel and textile industry occupies a unique and important place in India. One of the earliest industries to come into existence in the country, the sector accounts for 14% of the total Industrial production, conduces to about 30% of the total exports and is the second largest employment creator after agriculture. The textiles and garments industry is one of the largest and most prominent sectors of Indian economy, in terms of output, foreign exchange earnings and employment generation

The Textiles exports basket consists of Ready-made garments, Cotton textiles, Textiles made from man-made fibre, Wool and Woollen goods, Silk, Handicrafts, Coir, and Jute. Further, the export basket consists of variety of items: cotton yarn and fabrics, wool and silk fabrics, man-made yarn and fabrics, etc., of which man-made textiles and silk showed the highest growth rate.

India has the distinction of being the second largest producer of raw cotton, cotton yarn, cellulosic fibre and silk, besides being the fourth largest producer of synthetic fibre and the largest producer of jute. As one of the largest textile industries in the world, the Indian industry covers the entire supply chain and delivers packaged products to customers comprising a variety of fibres, diverse count sizes and cloth of different weight and weave, besides finished garments.

PRODUCT WISE TEXTILE AND CLOTHING EXPORT ITEMS

Commodities Readymade Garments Cotton Textiles Man-made Textiles

(MillionUS$) 6038.69 3290.31 1948.72

Wool & Woolen Textiles Silk Textile Total Add handicraft, Coir & Coir Manufacturers and Jute Total

66.57 406.82 11751.11

13065.24

TOP EXPORT ITEMS FROM INDIA FOR THE YEAR 2012 IN US$ BN

60 50 40 30 20 10 0 Series1

(Y AXIS Figures in percentage) INDIAS MAJOR EXPORT DESTINATIONS FOR CLOTHING

usa uk germany france UAE italy spain cananda netherlands sauthi

INDIAS MAJOR EXPORT DESTINATIONS FOR TEXTILES

EU USA UAE TURKEY BANGADESH EGYPT OTHERS

TEXTILE EXPORTS TOP 10 COUNTRIES (2010-11 AND 2011-12)

SR no

Country

%share

%share

%growth(2011-12 over 201011) 13.5 107.15 12.66

1 2 3

USA CHINA UNITED ARAB EMIRATES UK GERMANY BANGLADESH PR FRANCE ITALY SPAIN NETHERLAND Sub Total Others Total Textiles

17.79 7.34 6.78

16.91 12.73 6.39

4 5 6 7 8 9 10

6.45 5.96 4.48 3.01 2.9 2.66 2.1 59.47 40.53

6.13 5.55 3.76 2.96 2.82 2.37 2.17 61.81 38.19

13.64 11.23 0.25 17.6 16.05 6.36 23.72 24.13 12.54 19.43

EXPORT OF TEXTILE CLOTHING WORLD AND INDIA (BN USD) Textiles World Export 2005 2006 2007 203 220.4 241.3 Indias Export % 7.9 8.9 9.8 3.9 4 4.1 276 309.1 347.1 8.3 9.5 9.9 3 3.1 2.9 Clothing World Export Indias Export % Overall T& c World Export 479 529.5 588.4 16.2 18.4 19.7 3.4 3.5 3.4 Indias Export %

2008 2009

253.4 211.1

10.4 9.1

4.1 4.3

364.9 315.6

11.5 11.5

3.1 3.6

618.3 526.7

21.9 20.6

3.5 3.9

UAE TRADE BACKGROUND : The United Arab Emirates is a federation of seven emirates; Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah.

The UAEs top 5 import partners are:

1. China 12.8% Primary products: textile products, clothes, light industrial products, handicrafts, machinery and products made from gold, silver, copper, iron, tin.

2. India 10% Primary products: cotton, accessories, gems and jewelry, manmade yarn, fabrics, manufacturers of metals, cotton yarn, marine products, machinery and instruments, plastic and linoleum products, tea. 3. United States 8.7% Primary products: transport equipment, machinery, computer & electronic products, primary metal manufacturing, chemicals. 4. Japan 6.1% Primary products: transport equipment, electrical machinery, general machinery, foodstuff, raw materials, mineral fuels. 5. Germany 5.9% Primary products: nachineries, electronics, chemical products, measurement and control technology, iron, steel. *Source: IMF The UAEs top 5 export partners are: 1. Japan 23.6% Primary products: crude oil, aluminum. 2. South Korea 9.2% Primary products: crude oil, petroleum products such as naphtha and liquefied petroleum gas, aluminum, copper.

3. Thailand 5.0% Primary products: crude oil, scrap metal, gold and silver bar, chemicals. 4. India 4.8% Primary products: pearls, precious and semi-precious stones, gold, pulp and waste paper, sulphur and unroasted iron pyrites, metalifer ore and metal scrap, organic and inorganic chemicals. 5. Iran 3.8% Primary products: gas, cigarettes, spare parts for machinery, telecommunications and radio apparatuses, auto teller machines, mobile phones, heavy machinery, banana.

UAE INDIA BILATERAL RELATIONSHIP: UAE and India share a century old economic political and cultural link and matured multi dimensional relation. Trade between the 2 regions is continuously growing and the people to people contact is constantly increasing. Tourists from both sides are visiting for leisure and pleasure, and more and more UAE nationals are availing of healthcare and tourism facilities in India. India UAE Bilateral Trade and Investment Relations (Value in Million USD) Year Export Import Total Trade Percentage growth 2004-05 7348 4641 11989 66.85 2005-06 8592 4354 12946 7.98 2006-07 12022 8650 20672 59.69 2007-08 14021 12916 26937 40.7 2008-09 24477 23791 48268 65.8 2009-10 23970 19499 43469 -9.94

Date Source: DGCIS, Ministry of Commerce & Industry, India

KEY FACTS : UAE is now India's number one trading partner, outstripping China and USA. The total bilateral trade between the two countries for the financial year 2009-2010 was USD 43.47 billion. UAE accounts for about half of India's total trade in the Gulf region.

The share of textiles and garments exports in Indias total exports in the year 2003-04 stood at about 20 percent, amounting to US $ 12.5 billion. The quota countries, USA, EU and Canada accounted for nearly 70 percent of Indias garments exports and 44 percent of Indias textile exports. Amongst nonquota countries, UAE is the largest market for Indian textiles and garments; UAE accounted for 7 percent of Indias total textile exports and 10 percent of Indias garments exports.

READY MADE GARMENT EXPORTS

India's Export Of Readymade Garments

Items Readymade garments of cotton incl. accessories Readymade garments of silk Readymade garments of manmade fibres Readymade Garments of wool Readymade garments of other textile materials Total

2005-06 6552.73 260.68 1025.79 370.58 406.68 8616.47

2006-07 6747.84 257.25 870.87 361.43 451.42 8688.8 Knit App arel Indi as exp ort of knit app

arel accounted for $4.22 billion with an increase of 5.59% over the previous year. During the period Oct-Dec08, Indias export accounted for $996.68 million with an increase of 0.10 per cent over the corresponding period of previous year. However, during this period export to Germany, UK and France saw a decline of 13.36%, 23.34% and 6.65% respectively for the same period of previous year.

In the year 2008, USA, Germany, UK, France and UAE were the top 5 knit apparel export destination, accounted for 69% share in Indias total knit apparel export. UAE emerging as a new export destination at very fast pace.

Rank in India's Exports of Knit Apparel Year 2008 Country 0 1 2 3 4 5 -- World -USA Germany UK France UAE

Value of Exports %age Oct2008 Change 08 4221.09 1211.03 436.42 395.48 337.34 322.97 5.59 1.53 -1.22 -8.19 2.05 41.96

Nov08

Dec08

India's Knit Apparel Export OctDec'08 996.68

India's Knit Apparel Export OctDec'07 995.65 256.23 117.43 113.78 91.39 71.61

%age Change OctDec'08/OctDec'07 0.1 11.92 -13.36 -23.34 -6.65 8.24

328.94 262.14 405.6 101.37 35.22 35.12 21.48 26.82 76.71 22.93 22.45 24.46 22.3

108.69 286.77 43.59 29.66 39.37 28.4 101.74 87.22 85.31 77.51

Woven Apparel Indias woven apparel export accounted for $5.89 billion with an increase of 12.81% from the previous year. During the month Oct-Dec08 woven apparel export accounted for $1.26 billion with an increase of 11.57% over the same period of previous year. USA, UK, Germany and France emerged as a top 5 woven apparel export destination from India with a cumulative share of around 62%. Export to USA saw a decline in year 2008 by 4.75% as well as by 5% during the period OctDec08.

Woven Apparel Export Rank in India's Exports of Value of Exports Year India's Woven Apparel Export India's Woven Apparel Export %age Change OctDec'08/Oct-

Country

%age OctChange 08

Nov08

Dec08

Woven Apparel Year 2008 0 1 2 3 4 5 6 -- World -USA UK UAE Germany France Spain

2008

OctDec'08

OctDec'07

Dec'07

5889.69 12.81 1545.33 718.96 566.45 395.74 384.19 292.02 -4.75 6.38 42.27 21.93 13.58 49.11

361.08 386.61 512.57 1260.26 86.6 43.37 44.19 23.63 19.7 17.33 89.63 39 47.76 22.14 26.4 25.23 141.14 48.55 46.49 31.35 40.75 34.13 317.38 130.92 138.44 77.12 86.85 76.69

1129.57 334.09 128.74 106.01 69.81 77.72 47.25

11.57 -5 1.69 30.6 10.47 11.75 62.31

IMPORT AND EXPORT OF TEXTILE RAW MATERIAL OF INDIA Raw Cotton Exports And Imports During The Period 2005-06 To 2007-08 2005-06 Mn. Tonnes US$ Mn 2006-07 Mn Tonnes US$ Mn 2007-08 Mn Tonnes US$ Mn

Item Exports Cotton Raw including waste Cotton raw: combed/uncombed/waste

0.61

655.91

1.17

1347.58

1.18

1639.36

0.1

158.91

0.08

146.44

0.12

191.1

Raw Silk Imports During The Period 2005-06 To 2007-08 SI. No. 1 Items Import 2005-06 176.09 2006-07 148.71 2007-08 170.41

Jute Exports and Imports During The Period @005-06 To 2007-08

SI. No. Exports 1 2

items

2005-06

2007-08

Jute Yarn Jute Hessian Other Jute manufacture Floor Covering Of Jute Total

51.98 110.86

48.71 104.94

57.03

72.61

76.33 296.2

69.6 295.86

Imports 1 Raw Jute Total 21.04 21.04 35.25 35.25

EXPORT OF TEXTILE APPARELS FROM INDIA TO UAE

YEAR

VALUE IN LAKH 442560 483270 550200

2005-06 2006-07 2007-08

Source:DGCI&S (2009) (Value: Rs.in Lakh at current price )

Indias T&C market for the year 2009 and 2015(projected)

2009

Total textile and clothing market US $ 55 Billion

Export market US$ 22.4 Billion (43%) Domestic market US$ 32.6 Billion (57%) Export market US$ 43 Billion (43%) Domestic market US$ 57 Billion (57%)

Textile Exports US$ 12.7 Billion

Apparel Exports US$ 9.7 Billion

2015

Total textile and clothing market US $ 100Billion

Textile Exports US$ 22 Billion

Apparel Exports US$ 21 Billion