The developed economies of the world like US and UK have largely remained textile importers. The textile industry is a major industry to the developing economies like India and China. They have remained the market leaders of textile from very early times. USA, UK, and other developed economies of the world till now preferred to import textiles from these countries. But now, there is competition to these countries!

Almost all the major publications agree that ASEAN countries are making a place for themselves in the global textile industry. Countries like Thailand, Vietnam, Myanmar, and Philippines have a potentially strong textile market. They are developing their textile industries well. Their exports of textile products are continuously increasing. These countries have started giving a tough competition to India and China. They have fair chances of ruling the global textile market in the distant future.

China, the biggest textile industry of the world, is passing through an economic slowdown. Exports have decreased in the country. Due to recession in developed economies like USA and UK, there have been lesser demands for China-made products in the market. Besides, labor costs are also increasing in the country continuously, because of which the finished goods have become all the more expensive for foreign buyers.

The case is almost the same with India. Inflation has become rampant in the country. It has increased the input costs, because of which the finished goods have become costlier. Researches indicate that 40 percent of manufacturers have reshored their units back from India and China to USA. If not reshored back, they have found other cheaper destinations for manufacturing. India is no longer a favored destination for outsourcing.

The textile industries in these countries have been adversely affected. Exports have come down as compared to the previous years. Apparel exports were worth $989 million in August, 2012. This is 7.2 percent lower as compared to the apparel exports worth $1066 million in August, 2011. The Chinese textile exports were worth $141.58 billion in the year 2012, a rise of only 0.3 percent which is around 25 percent lower than the growth seen last year.

Association of South East Asian Nations (ASEAN) comprises of Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. These countries are developing countries largely. Only some of their industries are developed. Textile is a sector that majority of these countries concentrate on. This is because it helps them earn good revenue with minimal investment. The textile industry in these countries is developing quickly.

Developed countries like USA and UK, which till now relied on India and China, are looking towards ASEAN countries in order to satisfy their textile requirements. Textile exports from ASEAN countries have increased manifold. Textile exports in ASEAN countries increased from $300 million in 2009 to around $1.3 billion in 2011. It is believed that textile exports may face a downturn in other parts of the world sometime in future because of the crisis in Europe and USA, but not in the ASEAN region.


It is not just developed countries of Europe and USA that resorts to textile imports from ASEAN countries. India and China also indulge in textile imports from ASEAN countries to a certain extent. Singapore is the largest source of textile imports from India followed by Malaysia, Indonesia, and Thailand. Of course, India also exports to these countries. China indulges in imports from these countries too!


Exporters from India and China feel the competition from ASEAN countries when it comes to textile exports. They are looking for new countries to who they can export textiles. Mexico is emerging as a preferred destination to export textiles from India and China. Russia is again an emerging destination for India and China to export textiles. India plans to increase its exports to these non traditional markets from 24 percent to 35 percent.


Their gradual emergence as new textile giants may prove to be a bad news for India and China. They are giving a tough competition to the two countries. They are grabbing a lot of business. In fact, they are forcing India and China to look for other alternatives to export their textiles. USA, UK, and other European countries have already started importing textiles from ASEAN countries in large quantities. Their goods are cheaper comparatively.


India and China were seen as the future superpowers of the world. But owing to a slowdown in their economies, all the industries in the country has been adversely affected. In such times, the textile industry, which is a vital industry to both the countries, should not suffer. Otherwise, the entire economy of the country can face problems. The rise of the ASEAN countries as textile giants can prove to be a cause of worry for the two world giants.


Vietnam is one of the countries in the ASEAN region that offers the biggest competition to India and China. It saw an increase of around 22 percent in the year 2010 in the export of textiles to USA. Its exports to Europe increased by 14 percent in 2010. Its exports to Japan increased by 20 percent in 2010. It was the second largest exporter to USA and third largest exporter to Japan and Europe in the year 2010.

 

Many textile manufacturers outsource their production work to developing countries for cheap. Previously, India and China were the only option available with textile manufacturers. But now, many Asian and African countries have emerged that do similar work. Besides, labor costs in these countries are low. Manufacturers can get their work done for cheap. This is the reason manufacturers prefer them over India and China.


It cannot be denied that India and China face competition from ASEAN countries. But there is one factor that gives India and China an edge over them. There is a shortage of technical expertise in these countries. Since they are new to manufacturing, they may or may not be able to match up to the quality that India and China delivers. This restriction may not be present for eternity, though!


As for now, India and China have an upper hand over the ASEAN countries. This is because labor costs in the two countries are cheaper as compared to the developed countries, and they also promise quality to a certain extent. ASEAN countries need a bit more grooming. India and China can continue their economic growth with the help of these factors. Textile industry is vital to the economic growth of both the countries.


From the looks of it, the future of ASEAN countries in terms of textile is bright. They are fast emerging as the textile capitals of the world. There are fair chances of ASEAN countries ruling the global textile industry in a short span of time. They may pose a threat to the position that India and China is holding right now. Serious consideration in this regards has to be initiated.


References:


1.      Newstrackindia.com

2.      Apparel Export Promotion Council

3.      Morningwhistle.com

4.      Aseansec.org

5.      Antaranews.com

6.      Unescap.org

7.      Articles.economictimes.indiatimes.com

8.      Textileworldasia.com