The textile industry is one of the most important industries in Iran and has played a significant role in job creation and economic growth. However, it has suffered from a severe recession in recent years and is struggling with many problems. It seems that this industry has been forgotten, and no one is seriously trying to solve its problems. The responsible agencies must hurry to remove obstacles to this highly potential industry.
The clothing industry is one of the leading and most popular industries in the world, which has attracted the attention of many nations. The Iranian artisans turned to the clothing industry in the late 1970s. From the beginning, Iranian clothing found its place in European markets due to its high quality. However, this popularity was short-lived, and many negligences caused the industry to go downhill. Accordingly, today the countries that were once unable to compete with Iranian clothing have now taken the place of Iranian products in European markets.
According to activists in the textile and clothing sector, wrong policies and little attention have put the country’s clothing industry on a downward trend and marked its decline. Today, Iran could take advantage of economic development and growth but has given way to competitors such as China and Bangladesh, which produce a quarter of the world’s consumer clothing. Unfortunately, Iran has become one of the significant clothing importers from these countries and ranks first in clothing smuggling.
Meanwhile, Iran’s garment industry is still competitive with other garment-producing countries in terms of quality. Iran is still one of the top countries in sewing and design processes. Nevertheless, it is struggling with high costs of raw materials, high bank profits, cumbersome laws and regulations, illegal imports or smuggling, supply of raw materials, etc. These problems have made Iran lose the opportunity to compete equally in the global clothing market and leave half of the domestic market to foreign manufacturers.
According to textile artisans, today, this industry needs about one billion dollars of foreign exchange to import fibers and various machines. While instead of providing these budgets, which are only for basic needs and solving main issues, the government suspends the producer and eventually allocates the money in drops.
According to Ghadiri from the Iran Textile Exporters and Manufacturers Association, “There are more than one million workers in the textile industry. The government must take fundamental measures to maintain this employment rate and solve the problems of this sector. Otherwise, the unemployment trend and closure of production units in this industry will intensify.”
Currently, importing foreign goods is prohibited, but the manufacturers believe that the country’s raw materials price is high. They face the high cost of fabrics, which has led to their production decline. In addition, the unfavorable situation of fabric production is another problem of the country’s garment industry. It is due to the fact that a limited number of producers produce fabrics available in the Iranian market. Therefore, it is vital to invest and enhance quality in the fabric production sector.
According to studies, the most critical identified threats in the textile and clothing industry include the following;
1. High production costs and cost price compared to competing countries
2. Lack of development and modernization of the downstream layers of the textile finishing, clothing production, services, and distribution industry
3. The distribution network (wholesale and retail) is highly traditional, inefficient, and unorganized. It has a high cost and share of textile supply chains without providing the necessary value-added services.
4. Lack of necessary support for the national textile and clothing brands
5. Cultural and social constraints on product design
6. Lack of goal setting and vision at the industrial enterprises level
7. Culture of using foreign clothing
8. Weakness in designing products based on market demand
9. Use of old machines in the production process
10. Lack of up-to-date production technology for some products
11. Lack of a chain view of the government and stakeholders on the entire textile and clothing industry
12. Non-connection of VAT and non-collection of taxes from the final consumer
13. Creating many restrictions for domestic brands
14. Lack of proper planning in the exports field and lack of appropriate mechanisms in international trade and transportation of money and goods
15. Lack of easy and affordable access to raw materials
In addition to the above issues, the textile industry generally needs decisions and incentives that can be used to develop its growth process.
These decisions and incentives include the following:
• Modify laws related to labor and social security based on small businesses and facilitate rules about social security to create more employment
• Amend the rules related to insurance of clothing supply contractors to develop clothing brands
• Encourage clothing brands to operate transparently in their retail system and submit their entire process to the Tax Affairs Organization. Discount on performance tax in steps up to 5 years
• Development of specialized training on production, productivity, and quality in the garment industry
• Attracting foreign investments and participants in domestic production
• Recognition of production activities without owning a factory to develop clothing brands according to the existing guidelines on outsourcing and allowing clothing brands to operate in various categories of clothing, leather bags, shoes, perfumes, etc.
• Facilitate the assignment of operating licenses to clothing brands
• Facilitate the recognition of the garment industry as a green industry and issue operating licenses for workshops of more than 50 people in large cities, regardless of the radius of 120 km
• Creating the necessary incentives for the transparency of producers and reducing the so-called sub-step products
• The gradual establishment of commodity identification according to the executive regulations of Article 13 of the Law on Combating Commodity and Currency Smuggling
