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The Growth of India's Apparel Exports
17 th Nov 2015

A report by the credit rating agency ICRA suggests that Indian garment exports are likely to increase to $18 billion this calendar year as opposed to $16.5 billion in 2014.

The company also predicts a steady growth in exports by 20% to touch the $20 billion mark the next year, reflecting the growth in apparel trade worldwide.

The apparel industry is of utmost importance to the country for it is India’s second largest employer after agriculture. What also makes the Indian garment industry so integral to the economy is that aside from being a producer, it is also one of the largest consumers of textile raw materials that are produced in the country. India produces apparels and textiles for some of the world’s largest brands, notable among which are WalMart, Tesco and Marks and Spencer.

Not just exports, but India’s domestic apparel market is also growing considerably, thanks to the increased purchasing power and technology-enabled access to Indian apparel online. The domestic market has registered an impressive growth of ten percent over the last five years and is slated to record double digit growth this year as well. High domestic consumption of Indian apparel online has driven even small players from tier-two cities and villages to e-commerce. So the average Indian consumer is now flooded with choices from all across the country while previously the choices were limited to only global brands or those of their own geographic location. This combined with the exposure to global fashion and disposable income has naturally led to an increase in demand for traditional as well as export-quality garments even within the country.

Colourful Indian Apparel | The Growth of India's Apparel Exports

While the numbers appear heartening, it must be noted that the Indian garment industry is only the world’s sixth largest exporter despite India being the largest producer of cotton. The modest state of the Indian garment exports could be attributed to the low levels of penetration of modernisation in manufacturing and the fragmented nature of the industry. However, despite the competition and the problems with the inherent nature of the Indian garment industry, the future of Indian garment exports appear to be on the upswing, thanks to the political turmoil and safety concerns of labourers in Bangladesh and the rising cost of production in China - two of India’s biggest competitors in the apparel exports market.

But in order to maintain the momentum gained, there needs to be structural changes to the Indian garment industry at the grassroots level. This would help combat the challenges of the unorganised nature of the industry.

Coming as a blessing at this time are modifications in the government's programme to upgrade the textile sector - Technology Upgradation Fund Scheme (TUFS) - which are now focusing on downstream sectors like weaving, garmenting and processing, leading to the growth of technology and more integration of the various processes involved in textile production. That, combined with increased demand for readymade garments gives a competitive advantage to the garment exporters of India.

What remains to be seen is how the Government further supports the garment exporters of India by investing in mechanisation, product development and innovations that will help India leave the competitors behind to emerge as the number one exporter of apparels in the world. Being ardent lovers of India’s indigenous fabrics and textiles, we also hope that the Government does its bit to encourage trade of traditional Indian handlooms aside from mass-produced apparels for global brands so that the entire world can experience the beauty of India’s rich textile heritage.

Image source - csae blog, indiawires

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