India Is Strong On Labor And Social Compliance

Rendezvous

India Is Strong On Labor And Social Compliance

Rahul Mehta, Managing Director of Creative Casual Private Ltd., and Chairman of the Clothing Manufacturers' Association of India (CMAI) was recently appointed as the vice president of International Apparel Federation. The expert shares his views on being the first Asian to be elected as the vice president of IAF and gives an insight into the Indian apparel industry. In conversation with Shruti Karthikeyan.

You are the vice president for the International Apparel Federation (IAF). What does this mean for the apparel industry in India?

IAF comprises national clothing associations of nearly 60 countries along with individual corporate members, most of the large international retailers and brands are members, and it consists of various other supply chain partners and educational institutions. In all, about 200 members represent all these categories.

The important part is that IAF has 60 countries whose national associations are its members and therefore it can provide a very useful platform or link between manufacturing industries of various countries. As an individual honor, I am the first Asian to be selected and hopefully next year I will take over as the president of IAF. But the main advantage I feel is we can have access to 60 countries, their markets, policies, interaction; it could be a useful platform for us.

The IAF convention was held in Shanghai recently, were there any trends for Indian business?

These conventions are primarily learning experiences and an exposure; it does not result in any immediate business. As a delegate, it gives you a good networking opportunity with lot of members from the region and from across the globe.

Not many from India attended the convention, but there were one-on-one meetings organized with the Chinese distributors, retailers, so those who were interested and keen were able to establish such links.

The Federation is working extensively on a global framework for sustainability. How is it progressing?

IAF is progressing well in this context. The federation is trying to spread the message that IAF is solidly behind the moves to make the production, the products more eco-friendly and more sustainable. Even in terms of compliance issues, we have taken a stand, communicated to the governments and raised our concernsregarding the incidents that took place in Bangladesh. We are hoping to have more and more learning sessions on different processes that can be introduced and on different raw materials that can be introduced. For example, we recently circulated a list of about 100 raw materials that can manufacture green apparel.

Where does India stand in terms of sustainability?

There are two issues here, one is going green and the other is labor and social compliance issue. India is strong on labor and social compliance; most of our factories are compliant with basic requirements in the organized sector. There is no child labor; most of the industries follow laws of the land, fairly strict supervision by government inspectors and other government bodies. We score pretty high here and the industry is open and transparent as well. Some countries where the factories are in deep interiors do not encourage supervision; here in India we allow surprise checks too.

As far as sustainable production is concerned, we are still lagging, but are not doing anything illegal. Earlier, there were issues about effluent treatment, dyeing standards, especially in clusters, but all this is being taken care of.

How is the development of domestic apparel industry being taken care of by CMAI?

CMAI is taking lots of steps for the development of the domestic apparel industry. Firstly, the largest garment fair in the country is organized every year. The biggest one was held in July this year, where 640 brands and 27,000 retailers participated. We did a tremendous job creating a platform where newer manufacturers could come; retailers can come, be exposed to each other, and introduce their products and their stores to the industry.

Second thing is we have a testing laboratory at a very minimal cost that undertakes all the testing of fabrics and garments, we offer this service at costs that are 30-35% lower compared to international labs as we operate on no-profit and no-loss basis. We have begun our training institutes - one at Pune, and setting up another one at Kalyan and hoping to set up two more in Maharashtra. We are helping the industry to get skilled labor.

We are also undertaking a major project in the near future called 'Size India' with the assistance of the textile ministry and NIFT , who will undertake a detailed study of the Indian population, so in this way, we will be measuring body sizes of nearly 75,000-1,00,000 Indians in order to come up with a standard size. We are also closely working with the government to introduce handloom products to modern India which is a big project which should take off in February next year. We are also trying to work with the government to try and incentivize larger factories to start training of labor within their premises.

Also, we regularly and effectively interact with the government on policy issues, give our opinions, support the government in their ideas. We have played a stellar role in getting exemption of excise duty on garment. Last month, a group was formed within CMAI called IVD - essentially to get together smaller but emerging brands, the smaller regional brands, who have the ambition to come up to national and internationallevels. We conduct regular training sessions helping these brands to grow from family management to professional management.

There are several international apparel brands trying to gain a foothold in India. How has the market been for these major international brands in India and do the domestic brands face competition from them?

India is a huge market. Competition from international brands would have been a severe threat if there were only five to ten brands in the market. But that's not the case here and there is enough market space for both sectors to co-exist. International brands for the next 10 years won't go to Latur or Amravati, they will mostly remain in metro or semi-metro cities.

Indian market is still growing at 15- 20%. India is a unique market with special customer attitude, sensitivity; it is not easy for the international players to come in and grab market share. At one time, they could be successful seller merely because you are an international brand and nothing else was coming in. Now even for Levis jeans to be successful, it has to be a good product. Many international brands are not doing well in the Indian market.

Have apparel exports from India improved? Are the orders being diverted to India from China and Bangladesh?

During the last six months, growth in exports has taken place. We are growing at 15% in dollar terms, which is a big thing compared to the last couple of years. To some extent, orders have been shifted but it is a slow process, it can be because of devaluation of rupee and also because of the slight improvement in the market conditions of our major trading partners. It is also because of the measures the government and the industry together took to expand the market base.

Has the investment in India's apparel industry increased?

I don't think investment has increased, but people are beginning to look at investment. Six months to one year ago, hardly any expansion in garment sector took place,but now peopleare looking at increasing their production & capacity.

What apparel trends are seen in the Indian market?

Overall, denim seems to make a comeback, cotton bottoms took over in 2012-13. We are anticipating denim to comeback in 2014 very strongly; ultra loud styling and designing are out, and we have gone back to basic, simpler, sober and muted kind of styling. Classic designing is preferred for men. In women's wear there is a demand for western wear. Possibly a year from now, the formal wear and office wear in womenswear segment will grow.

Kidswear is a strange market as all the well-known brands in kidswear are either in trouble or have simply disappeared. It has become more decentralized, some of these brands should be making a reentry. Even the international brands in kidswear are not doing well in the market.