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How is the RMG market faring worldwide and in India? Which issues shall remain to be worked upon for better performance in the sector?
Readymade Garment Industry is one of the sectors which
will definitely continue growing across the globe for years to come. In the
past i.e. in the last decade or two, the growth has been at around 5% - 8% year on
year and it has a substantial growth prospect to double the volumes in the next
5 years.
The market world over is very distinctly divided into
two sets as suppliers and buyers, having varied positions geographically and
economically. The Buying market is predominantly governed by the US and the EU.
Besides, off late Russia also seems to be catching up with the buying fever.
Geographically this is been termed as western market and economically these
have been the world’s strongest markets. On the other hand, the Supply side has
been India, China, and Bangladesh which are economically growing markets. Having
spoken about Bangladesh, it has been noticed that Bangladesh has been growing
at a very rapid pace in RMG exports. This can be well appreciated by the fact
that the apparel export of Bangladesh was 4% of its total exports in 1980, whereas
the same accounts for 80% in current times. Bangladesh beats other Asian
countries in terms of its low manpower cost.
In the last 10 years Indian Apparel exports have seen
good growth. However, the last 3-4 years have been struggling times for the Indian
industry, the reasons being the double dip recession post 2008 and the shifting
of international interest towards countries like Bangladesh. However, the Indian
export market will definitely benefit from buyers who are trying to shift away
their sourcing either fully or partially from China. Moreover, Indian domestic
market itself is maturing at good levels as the taste as well as buying power
of Indian urban consumer is growing. Though Indian domestic market is being
more sentimental than required towards US and EU slowdown, overall there exists
a great deal of optimism. I expect the Indian retail market to grow
tremendously once the FDI approval issue gets sorted out.
Volatile labour condition is one of the biggest challenges
Indian apparel manufacturing industry is facing and this is the largest issue
to be worked upon. Lower wages is one of the major factors because of which the
interest of workforce seems to be lower towards this industry than any other.
Companies need to look at working with the concept of economies of scale. There
lies a great need for very large and ultra large manufacturing units which can
compensate their overhead savings towards better pay hikes to workers thus attracting
stable workforce. Certain state governments have already started giving
incentives to large manufactures due to heavy employment opportunity in this
sector. The State and Indian Central Governments need to continue such efforts
to help boost the entire industry. India with a large population and being one
of the fastest growing economies has all the potential to become the world hub
for RMG market.
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Published on: 04/04/2012
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.