Nationwide Spinning Mills went on one day strike on 23rd May, 2011

Spinning Mills demand restoration of Duty Drawback Incentive and DEPB Facility for Yarn Exports also Remove Excise Duty on Branded Garments.

More than 70 textile mills of the region located in Ludhiana, Samana, Dera-Bassi, Lalru Belt of Punjab and Baddi, Barootiwala and Nalagarh belt of Himachal Pradesh remained closed today as a part Nationwide protest of spinning mills against Government Policies.  It is estimated that more than 10 million kilos of yarn production was lost today.

The protest call was given by Confederation of Indian Textile Industries (CITI) which is a federation of regional associations, where Northern India Textile Mills Association (NITMA) is also a member. The loss to the industry for today’s strike is more than 200 crores.

In April last year, Government had withdrawn the Draw Back incentive on export of cotton yarns along with facility of Duty Entitlement Pass Book (DEPB). As if this was not sufficient to kill the spinning industry, Government had put a ceiling of 750 Million Kilos for yarn exports. With a result many yarn manufacturer exporters lost their committed buyers abroad.  These foreign buyers have now shifted their purchases to other countries.

In addition government levied an excise duty of 10.33% on braded garments. As per report, the sales of garments have slowed down with the result the off take of downstream textile units such as weaving and knitting industry supplying fabrics and spinning industry supplying yarns diminished.

Last October, government allowed 55 million bales of cotton for exports. That resulted into increase in the prices of cotton in the domestic markets. Since cotton is the main raw material for making yarns, margins on yarn sales became under pressure. Many Spinning mills made huge losses.  Now that cotton prices started falling down resulting into fall in yarns prices, whereas, Mills had purchased the cotton at previous high prices thus mills started making further losses. Simultaneously, demand of cotton yarn both in the domestic and Global markets slowed down, as of now. Spinning mills started building huge stocks of yarns, estimated 500 million kilos at present. This has put a dent into the working capital of the mills and it has become difficult for them to meet day to day expenses.

As per the decision of the CITI the mills will now curtail their production to 33% for a week that is the mills will run only one shift. This situation will be reviewed after a week.

It is hoped that government will concede to the demands of the textile industry and immediately restore Duty drawback and the facility of DEPB for yarn exports and that the ceiling of the yarns exports will not be resorted to again. Also the excise duty on the garments will be withdrawn with immediate effect. If these demands are not met with, many spinning units will close down rendering millions of workers unemployed.  

Untiring Trends in Knitwear for Autumn/Winter- By J.N.Vohra, M.Tech, B.Text, F.I.E., C.Eng (I), MPMA, MIMA

Over the years, knitwear has become a modern garment and is an essential add to the wardrobe of fashion conscious people or otherwise as a warm wrap for the winter. New fibres and state of the art technology for the manufacture of knitwear keep this traditional attire up to date. With the start of the new season (March onwards), manufacturers of knitwear are always for the look out of some trendy and sellable colours and designs along with fibres for the ensuing autumn/winter season. They, either base their collections on best sells of the last season or trends that appear in magazines, off-shore exhibitions and fashion shows. Designers working in knitwear units are limited by their imaginations for design creation.

Lady’s Knitwear

One thing is sure that Cardigans have always remained in fashion and is a hot purchase for the autumn/winter. It is different matter that even cardigans have seen changes in Silhouettes with extra designer shapes; sometimes  body hugging, big, baggy and other times oversized to go with  fitted trousers, skinny jeans or a dress.  Knit structures, if not chosen carefully become illusory to draw attention away from otherwise a well silhouetted cardigan and the feminine shape of the wearer. Many manufacturers mix heavily knits structures, rib and cables, lending asymmetric effect. Looks become unorthodox if over and above it the panels are printed or shimmered in metallic yarns or beads.

I believe fine knitted cardigans with carefully done subtle structures go well with all sorts of bottoms rather than heavily structured and if length is chosen properly become a great casual alternative to a coat. With the advent of new finishing techniques, Knitwear has become softer than ever along with the use of fibres like Lamb’s wool, angora and blends. Though, for lesser cooler months, cotton cardigans are ideal

Men’s Knitwear

Men's fashion inclinations are greatly unlike women's fashion; however, men’s fashions are equally important in designing knitwear. Generally men prefer to wear clothes that fulfil their functional purpose, fashion comes next. Year after years the change in men’s styles moves much slower; jeans and suiting are classic examples. While there are distinct styles of knitwear and its feature, they may not be inimitable to the year.  The same can't be said of most women fashion trends.

For men wide variety of Knitted garments includes trendy v-neck , round neck, polo neck, , turtle neck and mock neck pullovers and sweaters.  V-neck sweaters are traditional classic that has withstood the test of time. Buttoned long-sleeve jackets made of merino, cashmere or even cotton suits the taste of modern men. The range of men’s knitwear offered by suppliers allows wearers to choose the style best suited to their tastes. Cables, stripes, Intarsia are evergreen knitwear. These classic, clean-cut garments are deigned to endure changing fashions, remaining a wardrobe staple in years to come.

As for colours of knitwear that are best choice of men are common brown, beige, black, white, and gray though, bottle green, yellow, orange and maroon are also worn by younger lots. Selections are plentiful when it comes to cool shades of blue, indigo and plum.

Excise duty on branded garments is unjustified

Excise duty on branded garments is unjustified

J.N.Vohra, M.Tech, B.Text, F.I.E. C.Eng., M.I.M.A. MPMA

In the Budget 2011-12, the government levied 10 per cent excise duty on branded textiles and garments which came as a big jolt to the garment industry. Earlier, readymade garments and made-up textiles were under optional excise duty regime which has now been converted into a mandatory levy. That also meant that the factories will now have to register with central excise, the administrative costs of which the small units could ill afford.

The imposition in excise duty came at a point when the clothing industry was already reeling under 100% hike in the cost of cotton yarn.  The branded and trade mark labelled apparel business is about 40% of the estimated one lakh crore textiles and RMG business in India. The increase in excise duty coupled with hike in prices of raw materials made the retail prices of garments to go up to the extent of 30 to 35%, which are likely to go up further in the near future. This could result in the reduction in demand.

At one stage government did consider rolling back 10 per cent excise duty on branded garments, due to large scale protest by industry in Delhi, Ludhiana and Kolkata and other parts of the country. Retailers of branded garments like Shoppers Stop, Pantaloons, Westside, Lifestyle, Madura Garments, Reliance Trends and Arvind Brands also protested.

Finance Minister Pranab Mukherjee fell short of rolling back and instead diluted the proposal by enhancing the abatement from 40 per cent to 55 per cent of the retail sale price. With this relief a unit with 8.9 Crore turnover would continue to be eligible for SSI exemption. Apparel with MRP of Rs 1,000, a garment-maker will shell 10 per cent duty on Rs 450. According to the original proposal, excise duty was to be levied on Rs 600. The decision, however, failed to mollify the garment manufacturers. They wanted the tax to be withdrawn fully.

Textiles and garment manufacturing industry is the second largest employer in the country after agriculture with six million workers on its rolls.

A brand label on the garment can include a name of the company, sign, symbol, color combination or slogan. A legally protected brand name is called a trademark.

Some large units outsource the manufacturing of garments from other small unit under their brand name or trade name. This is the case with most of the knitwear units of Ludhiana. Goods manufactured by an SSI unit with brand name of others are not eligible for SSI concession, unless goods are manufactured in a rural area or the firm does not fall under the provision of exemption limit of turnover. EXCISE SSI EXEMPTION NOTIFICATION 8/2003 allows a manufacturer exemption from excise on goods cleared up to a turnover of 1.5 Crore in a financial year provided turnover in previous year is less than 4.0 crore.

It may be said here that levy of 10% excise duty on branded garment is unjustified and is retrograde step taken by the Government. Government must work out some relaxations such as exemption to job workers who work for brand owners in India. Manufacturers supplying labelled uniforms to schools and corporate besides simplifying the procedure to claim excise exemption.

Many of the small units of Ludhiana put labels just because a garment has to carry some sort of label, not necessarily their label is a unique selling point. These goods are targeted to middle class and lower middle class segment. These manufacturers sell good to their wholesalers due to their personal relations developed over a period of time. This may also lead to non-use of labels stitching on the garments by many small scale units.