International trades in textile past present and future

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The presentation describes the overview of global trade in textiles & apparel, India's position and the trends that will impact the future trade landscape

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International trades in textile past present and future

  1. 1. International trade in textiles Past, present and future 12th March 2013 Presentation by Harminder Sahni, Managing Director Management Consultants
  2. 2. Discussion Points A. Overview of global trade in textiles and apparel B. India’s position in the global trade C. Trends that will impact the future trade landscape2
  3. 3. A. Overview of global trade in textiles and apparel3
  4. 4. Nearly US$ 700 bn. worth of textile and apparel goods crossinternational borders today…  The global trade in textiles and apparel Global trade in textile and apparel was ~US$ 680 bn. in 2012 In US$ Billion  This is approximately 4.5% of the +5% -3% trade of all commodities which is +5% +11% estimated at ~ US$ 15 trillion +7% 700 680 +3% 616 628 630  In last 17 years (1995 to 2012) the 556 542 504 trade has grown at a CAGR of 5% per annum. 360 304 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 Data Source: UN Comtrade4
  5. 5. Asian countries are the prominent exporters while developedcountries are the major importers Values in US$ Bn. Largest exporters Largest importers Country 2011 Exports Country 2011 Imports China 259 USA 118 Italy 38 Germany 56 Hong Kong 37 Japan 46 Germany 36 China 36 India 34 UK 35 USA 29 France 34 Turkey 22 Italy 30 France 22 Hong Kong 30 Bangladesh 20 Spain 21 Belgium 18 Netherlands 16 Netherlands 14 Canada 15 Spain 14 Belgium 15 Pakistan 13 S.Korea 14 Indonesia 13 Turkey 13 UK 11 Russia 115 Data Source: UN Comtrade
  6. 6. But the domestic consumption in China and India is on a highgrowth trajectory too… Apparel market size projections In US$ billion Region 2012 2025 CAGR India 45 200 12% China 150 540 10% India & China total 195 740 11% USA 225 285 2% EU 27 350 440 2% USA & EU27 total 575 725 2% By 2025. the combined market size of China and India will be bigger than that of USA and EU6
  7. 7. Progressively, fewer countries are having share of somesignificance in total exports Countries having more than 3% share in global exports China & HK 23% China & HK 24% China & HK 29% China & HK 38% Italy 9% Italy 7% Italy 7% Germany Italy 5% USA 8% USA 6% Germany 5% Korea Germany Germany 5% 6% 5% France Korea USA 4% Belgium 6% France 5% Turkey 4% India 4% UK 4% Mexico 3% India 4% 3% Japan India 3% France USA 4% 3% 3% 3% Turkey 3% Belgium Belgium 3% 3% 3% 3% 3% Turkey 4% India 3% Turkey Korea Others 29% Others 38% Others 39% Others 39% 1995 2000 2005 2010No. of Countries 11 10 9 6 There is a clear trend of consolidation in global T&A trade, where fewer and fewer countries are having share of some significance in total trade Data Source: UN Comtrade7
  8. 8. But new competitors from Asia are growing rapidlyTrade growth rate Bangladesh(2007 – 2011) Viet Nam India China & Hong Indonesia Netherlands USA Kong Pakistan Spain Overall trade growth ~ 4% CAGR Turkey Germany Korea France Italy UK Belgium US$ 10 Bn US$ 20 Bn US$ 100 Bn Trade Value8 * Exports value > US$10 bn
  9. 9. B. India’s position in the global trade9
  10. 10. Indian textile and apparel exports grew fast after quota phase out Indian textile and apparel exports In US$ bn. 33 27 +13% Textiles Apparel Handicrafts & Carpets 22 22 18 21 19 15 18 +6% 11 9 10 13 14 9 12 12 8 11 11 6 6 5 5 4 5 14 10 11 11 12 9 9 5 6 5 6 6 7 1 1 1 1 1 1 1 1 1 1 1 1 11999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-1210 Data Source: DGCIS
  11. 11. The exports are majorly directed towards USA and EU Largest markets of Indian Textile and Apparel goods Germany: US$ 2 bn UK: US$ 2 bn Italy: US$ 1 bn France: US$ 1 bn Turkey Spain: US$ 1 bn US$ 0.6 bn China USA UAE US$ 3 bn US$ 6 bn US$ 2 bn Bangladesh US$ 1.3 bn11
  12. 12. India is non-existent in several major trade categories  India’s overall share in global textile and apparel trade is about 5%.  However, out of total 839 textile and apparel commodities* there are 358 commodities in which India had a share less than 1%.  Cumulative trade in these commodities is ~ US$ 214 bn., while India’s trade in them is only ~US$ 950 mn. (0.4%) Largest Global Categories where India’s trade share is < 1% In US$ mn. Global trade India’s exports S.No HS Code Category % share value 2011 Value 1 611030 Jerseys, pullovers, cardigans, waist-coats, etc. of man-made fibres 19,695 76 0.4% 2 621210 Brassieres & parts 8,774 82 0.9% `3 620193 Men‘s anoraks of man made fibers 6,481 23 0.4% 4 620293 Women‘s anoraks of man made fibers 6,107 15 0.2% 5 621040 Other men‘s garments made up of Linoleum, Rubberized fabric. 3,289 5 0.2% 6 620213 Woven overcoats, raincoats and similar of man-made fibres 3,720 7 0.2% Total 214,098 950 0.4% Data source: UN Comtrade, Data for 201012 * As per 6 digit HS classification system
  13. 13. C. Trends that will impact the future trade landscape13
  14. 14. 1. Supply Chain Shifts  Domestic requirements are creating new markets locally  Eastern Markets like China, India, Indonesia and other growing economies are the new focus Wazir Analysis14
  15. 15. 2. China’s increased focus on domestic supplies will create atrade gap of US$ 100 bn.  China’s apparel market is poised to grow from US$ 150 bn.in 2012 to ~ US$ Global T&A trade 550 bn. by 2025. This will put pressure on exports and increase imports as projections well In US$ billion 1,700  Also, basic textiles and apparel industry will no longer be the prime focus of Other Government as it used to be, causing slower growthexporters of textile and apparel output China 6.5% 1,100  Lower than market performance in trade will create a gap of ~108 bn. for other competing nations to take up 700 404 600 5% 296 2011 2025 (P)15
  16. 16. 3. Western demand is slowing while Asian is increasing Apparel market size projections  In last few years, the apparel market demand along with economyInhas billion US$ stalled in most of the developed countries. Region 2012 2025 CAGR China 150 540 10%  Aging population and increasing costs have added to the negative demand EU 27 350 440 2% scenario USA 225 285 2% India 45 200 12%  Future growth will come from markets of China and India, which will grow in double digits Japan 110 150 2% Brazil 55 100 5% Russia 40 105 8% Canada 30 50 4% Australia 25 45 5% RoW 75 195 8% Global 1,105 2,110 5%16
  17. 17. 4. Synthetics will play a major role in future Long term Cotton Fiber Dynamics Production Projections Cotton (million tonnes) Fiber Demand Projected share of cotton Cotton Availability ~ 30 34 27 27 Cotton Price 25 22 2009 2010 2011 2015 2020 2025 Data Source: ICAC17
  18. 18. 5. Intra-Asia trade will double to US$ 350 billion After emerging as the largest manufacturer-supplier hub for textile and apparel Asia is now entering into a phase of increasing consumption. Much of the demand will be catered to from countries within the region on account of increase in number of trade agreements, emergence of new low-cost suppliers and growth of markets in China & India Projected intra-Asia trade and major exporters 2011 2025 Others Others China & HK US$ 34 bn. ~US$ 110 bn. ~US$ 200 bn. Japan CAGR: 5% CAGR: 4% US$ 7 bn US$ CAGR 5% US$ S. Korea 180 bn. 350 bn. US$ 9 bn India China & HK IndiaUS$ 12 bn. US$ 118 bn. ~US$ 40 bn. CAGR: 9%18
  19. 19. 6. Global manufacturing value chain will need US$ 350 billioninvestment  Market expansion of nearly $ 1 trillion by 2025, will require significant investment across the textile and apparel manufacturing value chain Retail Garment manufacturing Fabric manufacturing Yarn manufacturing Additional Additional market by Value of Production US$ 165 bn US$ 100 bn US$ 35 bn 2025 : US$ 1 trillion (VoP) by 2025 Investment required US$ 350 bn19
  20. 20. Thank you for your time & attention20

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