Not just the global economic downturn, but thegrowing productivity of the neighboring countries like Bangladesh, Sri Lanka,and China are now giving gitters to the Indian apparel industry.
Indian apparel industry, which was hit badly by therecession, was perceived to succumb to its hold. During the past years, Indianapparel industry was known for its alley shops, and using inexpensive materialsfor making apparels. After the lapse of a year since the global recessionstarted, economy is rejuvenating faster comparatively over the Westerneconomies, now showing strong growth prospects. Currently, the country is goingthrough a phase of rapid transformation, shedding their sweatshop image so asto compete in the global market.
Asiais in the global radar, attracting the attention of other internationalcountries. China, India, and Bangladesh are the leading textile manufacturersand major consumers as well. Mild signs of revival are seen with export ordersbeginning to flow in a gradual speed. Despite all the silver linings, theindustry is facing severe competition from its business counterparts like Sri Lanka, China, and Bangladesh. For the apparel industry, cost of the fabric makes almost 60% ofits selling price. Increase in the cost of fabrics simultaneously result in anincrease in the cost of apparels for Indian garment exporters.
Global market for textiles is changing, along with thecustomer tastes, and preferences making them more demanding. To grab theirslice of the pie, every country and manufacturer does not miss even a small andsingle opportunity. They work on new strategies to remain competitive in theglobal market. Bangladesh, Sri Lanka, and China are competent to exportapparels at a cheaper rate compared with the export value of Indian apparels.This greatly favors the Indian counterparts, who gain the commercial benefitsof exporting cheaper apparels.
Exports from the RMG sector of Bangladesh saw a remarkable10% growth from 2008 onwards, while that of India fell by 3%. The biggest advantage Bangladesh clothing manufacturers have vis--vis Indian manufacturers are thedisparity in wages given to workers, due to which the sector in Bangladesh holds an edge. Fabric availability at inexpensive rates, economies of scaleresulting from bigger manufacturing units favor the growth of Bangladesh apparel industry in the global arena.
While cotton remains a cost-friendly purchase in India, blended fabrics like polyester knit are imported from China at lower costs. This makes theglobal businesses to consider options of sourcing from China which is 5-10% lower than the Indian rates. Foreign buyers now lean towards China placing orders at an enhanced rate. . Apart from this the strengthening rupee hascaused a setback to the apparel industry. Sri Lankas low priced, but qualityproducts attract more foreign buyers. Many apparel manufacturing units in Sri Lanka are pre-occupied with an increasing number of international buying orders. Buyersfeel more comfortable placing orders with Sri Lankan factories, as they offerapparels at a lower cost, meeting with international standards.
India is struggling to prolong the competition, as its cost of production ishigh. Value added garments will be the key to tackle the competition fromneighboring countries. Features like more embroidery, and embellishments willtend to attract international buyers. Skilled craftsmen, business flexibilityand remarkable fabric quality are the major advantages; India has over its competitors.
Indian apparel industry is optimistic for revival and aquick growth. The country that was once having an image of working with manysweatshops, popular for its alleyway shops, and cheap fabric materials, hasmoved into the global arena and is all set to handle the tough universal competition,and is optimistically expected to do well in the coming months.
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