India has become competitive in both polyester yarn and fabric businesses in the last couple of quarters. The promoters of several textile companies have increased their stake in the last nine months by purchasing fresh shares in the open market on expectations of a recovery in demand, and thus better profit margins. The promoters of Raymond have increased their stake by 290 basis points (bps) to 46.7 per cent between April and December 2019. Similarly, the promoters of Arvind have raised their stake by 165 basis points in the same period. Indo Rama Synthetics, which has a low market capitalisation, has witnessed its promoters increasing their stake by over 18 percentage points. Other players, such as Filatex India and Trident, too, have raised their stake since April 2019. “We have recently completed an expansion at our Dahej plant and we will commence commercial operations of additional drawn textured yarn capacity plant by April 2020. There is an increasing demand for polyester yarn in both domestic and international markets, which prompted us to buy additional shares,” said Madhu Sudhan Bhageria, chairman & managing director, Filatex India. India has become competitive in both polyester yarn and fabric businesses in the last couple of quarters. This has prompted leading companies in the sector — Arvind and Filatex — to expand their fabric and polyester yarn capacities, respectively. “The overall sentiment is currently weak because of the global economic slowdown. But we are expecting the sentiment to recover in the next one or two quarters, and domestic textile consumption and exports to go up. The government is providing all possible avenues for the industry to take advantage of China’s decline in the global textile export market share,” said an analyst. An increase in shareholding of promoters is considered positive as it sends out an affirmative message that they see value in their companies at the current levels and are optimistic about the long-term prospects.
Source: Business Standard
Adequate provisioning for Amended Technology Upgradation Fund Scheme (ATUFS) subsidy – There had been a considerable reduction in budgetary allocation towards one of the flagship schemes of the sector, namely ATUFS, from Rs. 2,300 crore for 2018-19 to Rs. 700 crore for 2019-20. This primarily aims at incentivising capital investments in the downstream segments of the textile sector. Even though the amount was nearly in line with the actual spend of Rs. 623 crore, estimated for 2018-19, a low spend points to the slower pace of incremental capital investments in the sector and/or slow pace of releases. Continued access to these incentives remains crucial for encouraging investments in India’s downstream textile segments. Clarity and adequate provisioning for export incentive schemes – The export segment of the domestic textile sector is facing multiple challenges, including intense competition, heightened by preferential duty access available to certain peer nations, the subdued demand from some of the key markets and continued uncertainty on the export incentive structure. Also, delays experienced in clearance of some export incentives have aected the liquidity profiles of the exporters, further constraining their performance. In March 2019, the Government of India had notified the replacement of the Remission of State Levies (RoSL) scheme with the scrip-based Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) for export of garments and made-ups. This was done as a step towards eventual withdrawal of the export incentives, which are not compliant with the World Trade Organisation (WTO) norms. Accordingly, in the last Budget for 2019-20, allocation towards RoSL scheme had been reduced to Nil vis-a-vis Rs. 3,664 crore continued provision of the Merchandise Exports from India Scheme (MEIS) benefits, was expected to provide a temporary impetus to profitability of the apparel and made-up exporters, procedural issues and resultant delays in clearance of the RoSCTL dues have been observed in the current financial year. This apart, the scheme benefits are available only to apparel and made-up exporters. As some other segments such as cotton spinning are also facing headwinds in the export market, there have been increasing demands from the industry to expand the scope of RoSCTL to ensure refund of all input taxes across segments. Accordingly, clarity on rates and procedures as well as adequate provisioning for the export incentive schemes remains crucial for the liquidity and hence performance of the textile exporters.
Source: Deccan Herald
Southern India Mills’ Association (SIMA) Wednesday said that the new Remission of Duties or Taxes on Export Product (RoDTEP) benefit would refund all the embedded/blocked duties and taxes and cover all the textile products such as fibres, yarn, fabrics,garments, made-ups, technical textiles, etc., across the value chain to have a level playing field in the global market and remain competitive. In a statement, SIMA Chairman Ashwin Chadran thanked the Duty Drawback Committee and the Government for considering the inputs given by the textiles and clothing industry and enhancing the rates marginally across the value chain. The Duty Drawback being a WTO-compatible export benefit, the scheme would help the exports to achieve a sustained growth rate provided the duty drawback calculation takes care of all incidences of duties and taxes, he said. The duty drawback rate for cotton grey yarn has been increased from 1.7 to 1.9 per cent, for fabric from 1.6 to 2, made-ups from 2.6 to 2.8 per cent, apparel from 1.9 to 2.1 per cent, thus encouraging value addition and benefit the predominantly cotton based spinning sector, he said. This might help to boost cotton yarn exports to a certain extent, he said and appealed to the Government to remove the value cap for spandex yarn and certain categories of woven fabrics to encourage value addition. Stating that It was essential to refund the State and Central levies that were not refunded under duty drawback calculations to make the cotton yarn and fabric exports competitive, Ashwin said that the industry has been pleading the same from the inception of announcing Rebate of State Levies (RoSL) benefit for garments and made-ups.
Source: Covai Post
In a move that will help lessen the burden on the National Company Law Tribunal (NCLT), the government has notified the rules for winding up of companies under the companies law. The Corporate Affairs Ministry has notified the Companies (Winding Up) Rules, 2020, which would be effective from April 1. Petitions for winding up of companies are subject to various conditions, including thresholds on turnover and paid-up capital. Akila Agrawal, Partner & Head (M&A) at law firm Cyril Amarchand Mangaldas, said the rules seek to inter-alia reduce the burden of the NCLT by enabling summary procedures for liquidation to be filed with the central government. "Though the draft rules had made this available only for small companies, the final rules make it available to companies that have assets of book value not exceeding Rs 1 crore; and have not taken deposits beyond Rs 25 lakh or have no secured loans beyond Rs 50 lakh or turnover beyond Rs 50 crore or paid up capital beyond Rs 1 crore. "A large part of the procedure applicable to regular companies continues to be applicable to the companies that can opt for the summary procedure. It is therefore unclear if the process will be fast tracked merely by shifting the jurisdiction to the central government," she noted. Currently, voluntary liquidation cases are primarily taken up under the Insolvency and Bankruptcy Code (IBC). The rules have been notified under the Companies Act, 2013, which is implemented by the ministry.
Source: Economic Times
Manufacturing companies in India may need to fulfil 1,984 compliances under various central and state laws, which are time-consuming and increase the cost of doing business, industry lobby group Ficci has told top government functionaries ahead of the Union Budget. A study undertaken by the industry body has shown that the compliances, including approvals and filings, are required under 122 central and state laws, including those related to environment, labour laws, GST and the Companies Act. The issue was flagged before finance minister Nirmala Sitharaman during the pre-Budget consultations, where top officials were also present. Officials from the department for promotion of industry and internal trade were told to look into the issue, sources told TOI. The process can be streamlined as businesses need to go to agencies multiple times,” said Sandeep Somany, vicechairman and MD of sanitary products company Hindware, who recently completed his term as Ficci president. He pointed to multiple environmental clearances required under various laws as an example and added that pharmaceuticals and food processing sector companies with pan-India operations may have to undertake several times more compliances. Officials, however, said that all the compliances may not be required by all manufacturing companies. A company engaged in the engineering sector may need to comply with provisions of the Boilers Act but may not have to do anything with the Food Safety and Standards Act. “Over the years, the idea has been to reduce compliances and move towards a system of self-certification,” said an official, pointing out that the government is looking to do away with the need for renewal of several licences. While maximum number of compliances are required under Companies Act, GST would be at the second place if the 136 filings and approvals under Central, State and Integrated GST laws are added.
Source: Times of India
Introduction of favourable policies, allocation of substantial funds for growth, rollout of government-sponsored Fund of Funds (FoF), and investment in spreading the expanse of digital infrastructure are among the expectations of micro, small and medium enterprises (MSMEs) from Union finance minister Nirmala Sitharaman when she presents budget on February 1. India is on one of the largest and the fastest-growing markets for digital consumers and accounts for the world's second-largest internet market. With easy access to data and digital proliferation across the country, an increasing number of online shoppers from smaller cities and towns are boosting business prospects for MSMEs. "We hope Union Budget 2020-21 to include announcement on investment in spreading the expanse of digital infrastructure and enable consumers from small towns to have better access to e-commerce. Measures to increase disposable income will further enhance the digital economy. A level playing field between retailers will see increased participation of MSMEs and aid in growth of small retailers in India," says Amit Sharma, founder & CEO, Narvar. There are over 6 crore MSMEs in India, which together account for around 29 per cent of the country's GDP. Hence, it is expected that the government will introduce favourable policies and allocate substantial funds for the growth of MSMES, say Odhni directors Puneet and Yatin Jain. "Presently, out of 32,385 applications filed by MSMEs, 2,031 applications have been disposed of by the government under the delayed payment monitoring system called MSME Samadhaan. Apart from lack of access to capital, infrastructure, skilled labour and power supply issues are some of the problems that plague MSMEs in India. Therefore, Indian entrepreneurs hopes that upcoming budget will provide some long-term benefits to the MSME sector with better access to credit and lenient taxation policies," add Jain brothers. In June last year, the Reserve Bank of India (RBI) had recommended a government-sponsored fund of ₹10,000 crore to support investments made in MSMEs. "It's time to roll-out the government sponsored FoF to resolve the funding issues of the MSMEs in apparel, retail, and other sectors," feels Nidhi Yadav, creative head and founder, AKS Clothings. "Secondly, for better funding support from venture capitalists and private equity firms, policies need to be clarified on crowdfunding and other possible financial routes. On the other hand, to drive market demand, the finance minister should present a comprehensive yet clear e-commerce policy. Besides, some motivational schemes must be introduced for the young and aspiring women entrepreneurs of India, so that their knowledge and skills may get utilised in the economic development of the country."
Source: Fibre2Fashion
When United States Trade Representative (USTR) Robert Lighthizer reportedly visits New Delhi in the second week of February, both the countries are expected to finalise a mega trade deal, which is a precursor to a free trade agreement between the two nations and will be signed during President Donald Trump’s likely visit to India during February 24-25. Lighthizer will meet Indian commerce and industry minister Piyush Goyal to finalise the terms of the deal during the visit, according to some Indian media reports. Representatives from both sides reportedly met in Davos during the recent World Economic Forum to discuss the planned deal. A six-member US government team was in New Delhi recently and met Goyal and officials in other ministries to discuss the proposed pact. The issue of medical devices, which was a key obstacle in the trade talks between the two countries, has been reportedly resolved. India also wants restoration of benefits under the generalized system of preferences (GSP). The two sides have been engaged in talks to iron out the differences which began in 2018, when the United States levied global additional tariffs of 25 per cent and 10 per cent on the import of steel and aluminium products respectively. India responded by levying retaliatory tariffs on 28 products originating or exported from the United States with effect from June 16, 2019, for which Washington dragged it to the World Trade Organisation.
Source: Fibre2Fashion
India's second and third-largest markets for outbound IT services, which stood at $136 billion in 2018-19, according to Nasscom. As the European Parliament votes late on Wednesday to ratify the terms of Britain’s exit from the European Union (EU), Indian exporters are hoping to seize the gulf in trade relations that is set to emerge. “A lot will depend on the exact terms of agreement that the United Kingdom (UK) reaches with the EU. If the UK decides to enter into a Customs union with EU, shipment flows will continue unhindered and without much change to the logistics value chain,” said Ajay Sahai, director general of the Federation of Indian Export Organisations. A Customs union generally consists of a trade bloc composed of a free trade area and a common external tariff for products and services. This will require a new trade pact between both parties, which creates a common external trade policy. This may be similar to the current scenario where EU member states (EU) delegate authority to the European Commission to negotiate their external trade relations through the Common Commercial Policy. But chances for this are slim, experts say. “The UK government has said it won't hand over the power to decide on foreign trade matters to Brussels (EU capital). Britain will negotiate its own trade deals with various nations after Brexit with an eye on its own interests,” a highly placed source at the British High Commission said. “It doesn’t matter what the post Brexit scenario is, since India stands a good chance to exploit the opportunity. Indian goods will compete with British goods in EU and vice versa,” Sahai said. Betting on IT: According to a report by the British Parliament, services account for 80 per cent of the UK’s economic output and 46 per cent of exports, as of 2018-end. The UK is the world’s second-largest exporter of services by value and 41 per cent or $152 billion of its services exports flowed across the English Channel into mainland Europe. In the same year, the UK imported $116 billion worth of services from the EU. With EU nations like Poland providing significant IT support to UK companies, Indian firms are weighing their options to push further into both markets, say sources. Interestingly, the UK and EU constitute India's second and third-largest markets for outbound IT services, which stood at $136 billion in 2018-19, according to Nasscom. “London is a major gateway for Indian IT firms entering Europe and, consequently, operational headquarters are mostly based in London," an expert said, adding that a major shakeup in existing investment and trade policy may result in Indian firms having to shift their headquarters to other nations but this will also come with significant growth opportunities. Challenges remain: However, in its Strategic Review 2018-19, Nasscom had warned that a No-Deal Brexit may pose challenges. The easy movement of skilled workers between EU and UK has been helpful, which is not expected to hold out. Indian companies are the largest beneficiary of ICT visas issued by the UK, according to Migration Watch UK. In a 2018 report, it flagged 16 Indian IT companies for easily moving employees from abroad to Britain. For 2017, this included TCS (6,285 visas), Infosys (2,030), Wipro (1,795) and Tech Mahindra (1,020), among others. Prime among these, were the fear of a declining British Pound, which would see IT companies earning less from existing contracts and the postponement of large projects. "Our exports should be poised to take advantage of the impending gulf that will open up in trade between the UK and the EU," a senior Commerce Department official said. The official added that the Services Export Promotion Council has been asked to study the potential of exports that can be leveraged.
Source: Business Standard
The economic performance across G7 nations and leading emerging markets is expected to be muted in Q4 of 2019 owing to global trade tensions and sharp deceleration in real GDP growth in the US, China and India, the EIU said in a report on Wednesday. The report forecasts that the real GDP grew by 1.6 per cent quarter-on-quarter in India, but noted that this uptick was largely owing to base effect. "... this apparently strong headline figure was artificially boosted by the dismal performance of the Indian economy in the previous quarter amid weak consumer sentiment and tepid investment," the report said. The report, however, noted that series of government stimulus measures and a low interest rate environment are likely to spur demand and investment in 2020. Following which a rebound in full-year real GDP growth, to 6.1 per cent (up from an estimated 4.9 per cent in 2019) is likely, it added. According to The EIU, on a year-on-year basis, India's real GDP growth for the October-December 2019 period stood at 4.6 per cent, and for the January-March quarter of 2020 it was 5.5 per cent. For China, the world's second-largest economy, the report forecasts up to 1.5 per cent growth pick-up in the fourth quarter of 2019, from 1.3 per cent in the third quarter, as the conclusion of a first-phase of US-China trade deal at the end of last year helped to alleviate part of the uncertainty that businesses and consumers were facing. In Asia, India recorded, the best rate of quarterly growth in October-December, while Japan had the worst, as per the report. The EIU team forecasts weak fourth-quarter economic performance across the G7 and BRICS countries, owing to the combined effect of global trade tensions and sharp deceleration in real GDP growth in the US, China and India. According to the Economist Intelligence Unit's (The EIU) Q4 Global Forecast, factors like global trade tensions, renewed volatility in emerging markets; and political uncertainty in a number of EU countries were also responsible for the sluggish growth rate. Among the G7 countries, the US is expected to record the fastest level of quarterly growth in the fourth quarter of 2019, at 0.4 per cent, the report said. It added that "this still represents a slowdown compared with the third quarter, when growth stood at 0.5 per cent quarter on quarter". The EIU's quarterly forecasts include up to 51 headline series for G20 countries, the BRICS grouping (comprising Brazil, Russia, India, China, and South Africa), as well as key emerging markets. These forecasts are updated continuously and projected out two years, or eight quarters.
Source: Economic Times
Federation of Surat Textile Traders’ Association (FOSTTA) has asked textile market managements to comply with fire safety norms to protect markets from fire incidents. FOSTTA has decided to convene a meeting of textile market managements for giving them necessary instructions regarding fire safety measures. The decision has come after SMC’s fire and emergency services department started mock drill exercise in the textile markets located on Ring Road to identify obstacles. Fire officials said 21 textile markets were identified for the mock drill exercise that started on Saturday. The mock drill exercise will cover one market each day in the coming days. Fire department has encountered difficulty in entering many markets for carrying out firefighting activity. FOSTTA office-bearers said majority of the markets located on Ring Road were constructed 30 years ago. FOSTTA secretary Champalal Bothra said, “Textile markets are vulnerable to fire hazards due to presence of highly inflammable polyester fabric material. Though, we have not witnessed massive fire like the one at Raghuvir textile market, but still textile traders have to take fire safety measures.” Bothra added, “We had a meeting with fire department officials and they have instructed us to take immediate action on fire safety front. We have decided to convene a meeting of market managements to give them necessary instructions.” FOSTTA president Manoj Agarwal said, “We have requested SMC to remove all illegal encroachments from textile market area, especially roadside eateries that use LPG cylinders. Majority of the markets are ready to comply with fire safety norms.” Chief fire officer Basant Pareek told TOI, “We have been carrying out fire mock drills in the textile markets to understand the problems. In the last two days, we found that the entry gates at majority of the markets are very narrow and there are encroachments as well. We have discussed all the issues regarding fire safety with FOSTTA office-bearers.”
Source: Times of India
Mumbai: The rupee on Wednesday appreciated by 7 paise to settle at 71.24 against the US dollar following gains in the domestic equity market. Forex traders said rupee consolidated in a narrow range as market participants are assessing the economic implications of the coronavirus outbreak and awaiting cues from the Union Budget. At the interbank foreign exchange market, the local currency opened at 71.23. During the day, the local unit saw a high of 71.17 and a low of 71.29. The domestic unit finally settled at 71.24, up 7 paise from its previous close. The rupee had settled at 71.31 against the American currency on Tuesday. "Indian rupee gained as risk sentiment recovered amid a rebound in the global and domestic equities. Market players assessing the economic implications of the coronavirus outbreak," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. Meanwhile, Australian scientists said on Wednesday they have successfully recreated the novel coronavirus in a lab, for the first time outside China, a "significant breakthrough" which they say may help combat the deadly virus that has claimed over 130 lives and infected thousands. Sharma further said that strong foreign fund flows also supported strength in rupee as they have bought USD 2.21 billion equities so far this month.
Source: Financial Express
The continued LSM contraction has invited all sorts of criticism, as the slowdown still seems to be finding the bottom, in contrast to the hopes of recovery. The heaviest-weighted textile production growth stayed by and large stagnant, drawing concerns from some corners over the export performance. Some experts even went on to argue that zero growth in export-oriented textile LSM numbers mean that export volumes have either declined or stayed the same. Only that, this is not how it works. While the quantity of cloth produced may have stayed the same – the textile export performance has banked heavily on value addition deeper in the chain. Going back to “how to read LSM numbers" would not hurt for some around. The SBP too, has noticed that the mismatch between production and export volume data has widened further. It must be remembered that domestic textile output data is skewed towards primary products. The transition from low value-added products such as yarn and cotton cloth, to high value-added products such as apparel, is as clear as daylight. Onto the export performance. A 3 percent year-on-year increase in dollar value is not necessarily chest thumping stuff. A 10 percent year-on-year increase in food exports, which accounts for almost one-fifth of total exports, is not too shabby either. Rice accounts for half the food exports, and the resounding basmati comeback should instill hopes. Better still, massive rice export is all volume driven, despite significant dip in unit price. While Pakistan had its more than fair share of vegetable shortages, fruits and vegetable exports was not a disappointment. While fruit exports increased in quantity, vegetable exports raked in higher unit prices. Combined, horticulture exports have a bigger share than the oft-discussed leather, sports, or surgical exports. Surely, such impressive numbers warrant more attention from those who matter, in the bid to diversify the textile centric exports. And then the textile story. Looking from outside – a near 4 percent year-on-year growth in dollar terms is barely passable. Bringing in the volume story, which has now been going on for a few months, the picture looks brighter and better. There is more reason to rejoice that the high value-added exports such as apparel are the ones growing strongest. Even the unit prices, in some cases have shown resurgence. Textile performance should also be viewed with the perspective of global economic slowdown. The shift from high-priced apparel demand to mid-range apparel, in the developed countries, has worked in Pakistan's favor. Pakistan had the timing right in terms of textile production cost, as energy prices for textile industry were in line with regional prices for most of 2019. Energy input prices have reportedly been increased for export players. With ongoing expansion, the move to counter a subsidy of Rs10-15 billion at best, could backfire big time. The government would do well not to tinker with energy prices for the export sector.
Source: Business Recorder
The global trade value of yarn of coarse animal hair or horsehair has significantly declined between 2016 and 2018. Total trade moved down by 16.47 per cent in 2018 from 2016, according to data from TexPro. The global trade of yarn of coarse animal hair or horsehair was $9.11 million in 2016, which had dropped to $7.61 million in 2018. The total trade of yarn of coarse animal hair or horsehair is anticipated to slash to $6.61 million in 2021 with a fall of 13.12 per cent from 2018, according to Fibre2Fashion's market analysis tool TexPro. The global export of yarn of coarse animal hair or horsehair was $3.94 million in 2016, which decreased by 9.03 per cent to $3.58 million in 2018. Total exports increased by 16.24 per cent in 2018 over the previous year and is expected to reach $3.37 million in 2021 with a cut of 5.88 per cent from 2018. The global import of yarn of coarse animal hair or horsehair was $5.17 million in 2016, which was lowered by 22.14 per cent to $4.03 million in 2018. Total imports moved down by 13.15 per cent in 2018 over the previous year and is expected to further reduce by 19.56 per cent to $3.24 million in 2021 from 2018. Switzerland ($1.38 million), Germany ($0.59 million), China ($0.44 million), Ecuador ($0.35 million) and Italy ($0.24 million) were the key exporters of yarn of coarse animal hair or horsehair across the globe in 2018, together comprising 83.33 per cent of total export. These were followed by the Netherlands ($0.19 million), Denmark ($0.11 million), Turkey ($0.06 million) and UK ($0.06 million). From 2013 to 2018, the most notable rate of growth in terms of export, amongst the main exporting countries, was attained by Germany (107.92 per cent) and Switzerland (55.92 per cent). Sweden ($1.70 million), Germany ($0.54 million), Italy ($0.43 million) and Norway ($0.26 million) were the key importers of yarn of coarse animal hair or horsehair across the globe in 2018, together comprising 72.41 per cent of total import. These were followed by Japan ($0.20 million), China ($0.18 million), US ($0.11 million) and Slovakia ($0.10 million). From 2013 to 2018, the most notable rate of growth in terms of import, amongst the main importing countries, was attained by Germany (58.42 per cent) and Sweden (25.06 per cent).
Source: Fibre2Fashion
Benninger has acquired 100 per cent of LAB-PRO, with retroactive effect to January 1, 2020. Benninger is a manufacturer of technologically advanced textile finishing and tire cord machinery for the textile, tire, and conveyor belt manufacturing markets. LAB-PRO is a supplier of innovative over-all solutions in the discontinuous textile dyeing machine field. Benninger offers complete solutions for all major textile finishing processes, with a special expertise in the field of continuous open width processing of woven, knitted and technical textiles with minimum resource consumption. The jet dyeing machines and jiggers from LAB-PRO are known for having the lowest water and energy consumption and lowest fabric elongation compared to competitors’ machines. The Benninger portfolio will be extended by technologically advanced discontinuous dyeing machines such as jet and jigger dyeing machines as well as beam dyeing and laboratory dyeing apparatus. Fully automatic chemical, salt, soda, or dye dosing systems, which ensure the highest accuracy and reproducibility, complete the portfolio, the company said in a media statement. By combining the know-how and experience of both companies, Benninger becomes the leading system supplier in the field of continuous and now also discontinuous dyeing and finishing technology. By using Benninger’s worldwide sales, service, and production network, LAB-PRO will be able to increase its market presence. The integration of LAB-PRO’s experience in discontinuous dyeing technology leads to a further strengthening of Benninger as a total solution provider. With the leading products FabricMaster (Jet), JigMaster (Jigger), and BeamMaster (HT Beam dyeing), Benninger strengthens its strategy as a partner for all customers in the premium segment of the wet finishing industry. Thomas Widmer and Thomas Gerhard will continue to lead the company LAB-PRO as managing directors.
Source: Fibre2Fashion
Official Fairtrade seals have so far only been found on agricultural products such as coffee, bananas, tea or even cotton. Indian garment manufacturer Purecotz is now the first textile factory that has been certified according to the Fairtrade textile standard.
Pioneering more fairness in the textile sector
With the certification, Purecotz commits itself to paying living wages to all of its one thousand employees within the next six years. In addition to fair wages, the textile standard provides for further measures regarding work safety, employment contracts and complaint mechanisms as well as the freedom of association and the freedom to choose and form a trade union. Purecotz works exclusively with organic cotton fabrics - a large part of which is Fairtrade certified. For founder and managing director Amit Narke, the certification was a consistent step towards an even more sustainable and fairer production. "We follow the path of continuous improvement. Our goal is a balance between economic, ecological and social sustainability. The Fairtrade textile standard is an important signpost and source of inspiration in this respect", explains Narke. But it is also a business risk. "Purecotz is taking the first step here, which makes it all the more important that fashion companies follow this commitment and switch to fair textiles," says Dieter Overath, managing chairman of the board of TransFair e.V. (Fairtrade Germany).
First license partners for Fairtrade textiles
The first license partners for Fairtrade textiles have already been found with fashion companies Melawear and Brands Fashion. Both manufacturers are long-standing Fairtrade partners in the textile sector. "We have worked towards this day with a lot of energy. Now that we are also licensees of the textile standard, the goal of fair produced textiles is within reach," explaines Henning Siedentopp, managing director of Melawear. In addition, a spinning mill and a ginning mill are to be certified before the end of the year. Then Melawear would have access to a completely Fairtrade-certified supply chain. Because only when all steps of textile production are certified - from cotton ginning to yarn and fabric production to sewing - will companies be allowed to use the Fairtrade textile seal for their products. Clothing and corporate wear manufacturer Brands Fashion is also working on implementing the Fairtrade textile standard: "Our goal for 2020 is the certification of the world's first supply chain. This way, we are strengthening workers' rights and thus ensuring the payment of living wages in the long run," says Rabea Schafrick, deputy head of sustainability at Brands Fashion. Fairtrade was also present at sustainable fair Neonyt, which took place from 14th to 16th January 2020 in Berlin, Germany. TransFair, the German offshoot of the international association Fairtrade International e.V., was available for more information as well.
Source: Fashion United
