Isfahan to Host Int’l Exhibition of Textile Industry

The 15th International Exhibition of Textile Industry (SITEX 2023) is scheduled to be held from May 25-28 at Isfahan’s International Exhibition Center.
The expo is aimed at presenting the domestic capacities of the textile industry, creating interactions between artisans and business owners at the national and international levels, creating liaison between universities and the textile industry, providing job opportunities with growth in the number of active industrial units and helping boost exports.
Domestic artisans and producers of the textile industry and representatives from China, India, Turkey and Pakistan will showcase their products and services at the event, IRIB News reported.
The exhibitors are active in the fields of raw materials, yarn and fibers, spinning, weaving, dyeing, finishing, textile machinery, fabric and clothing.
Trade delegations from Pakistan, Turkmenistan, Oman, the UAE, Nigeria, Afghanistan, Indonesia and Burkina Faso are also expected to attend the event.
Specialized meetings and seminars about geo-synthetics and textile industry, productivity, measurement and color control in textile and clothing manufacturing are also planned to be held on the sidelines of the expo.
Those interested may visit the expo from 3-9 p.m. during the period.

 Annual Textile Imports at $1 Billion

A total of 900 million square meters of textile worth $1 billion are imported into Iran every year, according to a member of the Board of Directors at Textile Industries Association.
“Close to 3.6 billion square meters of different kinds of textiles are consumed in the country per year, some 2.7 billion square meters of which are produced domestically and the rest has to be imported,” Amin Moqaddam added.
The official noted that the Iranian textile industry needs investment to be able to continue meeting the local demand, adding that if investments expand to machinery and production lines, the country will be able to export its products.
He added that massive volumes of contraband textile enter the country every year and hamper local production.  
About $4.5 billion worth of textile industry products were smuggled into Iran in the fiscal 2021-22, according to Abbas Sarshar, a board member of Iran’s Textile Industry Union.
“The figure shows an %18.4 rise compared with $3.8 billion in the year before. Iran’s textile industry exports $1 billion worth of products every year and machine-made carpet accounts for close to 90% of this volume,” he said.

Clothing Manufacturers Air Grievances 

Garment manufacturers are grappling with recession due to smuggling, shortage of raw materials and sharp decline in purchasing power and dwindled consumption due to the outbreak of Covid-19, read a letter by Textile and Clothing Producers Unions addressed to Interior Minister Ahmad Vahidi and published by the news portal of Tehran Chamber of Commerce, Industries, Mines and Agriculture in January 2022. What follows is a translation of their letter:
Given the $2 billion share of smuggling in the $8 billion clothing market in Iran and its upsurge in recent months, shortage of raw materials and equipment needed by factories, as well as the sharp decline in clothing consumption and people’s lower purchasing power due to Covid-19, clothing and related industries have fallen into recession. Investment is going downhill despite the low cost of job creation in this sector.
The private sector demands the stoppage of smuggling. If the government is unwilling to do so, it should be honest and do not make promises or paint a rosy picture by providing misleading statistics about the fight against smuggling. 
Iran’s textile and clothing supply chain, with more than 7,900 industrial units and 140,000 trade unions and employment of one million people only in production alone, continues to be undermined by smuggling and unregulated, excessive imports via legal channels and agencies such as free and special trade zones, sailors, border markets, border couriers and travelers. 
When the plan to fight smuggled clothing brands at the supply level based on Article 13 of the Law on Combating Goods and Currency Smuggling was launched in fiscal 2018-19, manufacturers and economic players in the country’s clothing industry felt a little relieved. The Interior Ministry communiqué of Jan. 19, 2019 created coordination among organizations involved in the fight against smuggling (the central headquarter, provincial commissions, police, the Ministry of Industries, Mining and Trade, etc.); even the short implementation period of the plan (less than six months) led to a significant decrease in the supply of smuggled clothing, significant increase in the supply of Iranian brands and more than 30% growth in production and employment. Regrettably, disruptions in the implementation of this multi-phased plan with lame excuses by those in charge and directing all efforts to dealing with only the supply side practically creates a safe haven for the main entries of smuggling. Official statistics say smuggling has reduced to $1 billion from $3 billion of the year ending March 2019. However, according to estimates by the private sector, the best-case scenario is that smuggling decreased by less than $1 billion from March to September 2019. It is closer to reality to put the smuggling at $2 billion.
Officials with the Headquarters to Combat Smuggling of Goods and Foreign Currency say the rate of return of clothing smuggling to the supply level after interruptions in the implementation of plan at various times has been more than 70%.

Recommendations

Textile and clothing producers make the following recommendations in this matter:
First, the provisions of the Law on Combating Goods and Currency Smuggling in order to establish transparent infrastructure in the clothing industry chain must be carried out as soon as possible. These provisions include the establishment of goods identification and tracking systems, communication of Paragraph 4 of Article 18 of the law and the launch of mechanized sales tills. When it comes to combating smuggling, the most important issue is to create transparency along the chain. To reach this end, transparent mechanisms should be gradually established. Unfortunately, the lack of transparency has led to an increase in smuggling and informal activities in clothing sector.
Second, mechanized sales tills must be set up as soon as possible and value added tax needs to be replaced by consumption tax. The connection between VAT chain and the final consumer is one of the most important issues in creating transparency, but unfortunately at present VAT is levied up until to the production stage; the following stages including the wholesalers and retailers are not subject to this tax. The whole thing results in the lack of transparency through the chain and losses which are being inflected on producers. 
Third, the speedy communication of Paragraph 4 of Article 18 of the Law on Combating Goods and Currency Smuggling in the clothing group is urgent. Without communicating this paragraph, which is in fact a guarantee for the implementation of the Anti-Smuggling Law, officers and confiscators of smuggled goods will not be allowed to deal with unidentified smuggled clothing in warehouses under the Anti-Smuggling Law because Article 13 underlines that imported clothes which don’t have a product ID amount to contraband only at the supply level. 
Also, following the successful implementation of the plan in dealing with the smuggled clothes from well-known brands in early 2019 and the failure to communicate Paragraph 4 of Article 18, those who were accused of smuggling are being acquitted; they claim that their confiscated goods are made in Iran. Such a procedure will undermine the fight against smuggling. 
Fourth, instructions on imports of clothing, bags and shoes need to be written with the aim of determining the status of international clothing brands when the ban on imports is lifted. 
Fifth, the ban on the presence of smuggled clothes of well-known brands should continue according to the specific guidelines of the headquarters in this regard. Failure to do so will result in their quick re-emergence in the market and offset previous measures.
Sixth, step-by-step implementation of this plan in order to establish ID code for all imported and domestic goods is important. Fixing the misguided practices that lead to non-transparency in the country is certainly difficult and time consuming. However, it is inevitable in the fight against smuggling. Special attention should be directed to this issue as well as introducing fundamental reforms regarding the law on direct tax and value added tax. The private sector calls for accurate planning and perseverance in the fight against smuggling.