India’s Apparel Industry at a Turning Point: Opportunities and Challenges in the Global Market
Vertical Integration, Technology and Supply Chain Strengthening Key to India’s Apparel Growth
India’s apparel industry is entering a significant phase as global supply chains continue to diversify and international brands look for dependable manufacturing partners. According to Kam Raghavan, Chief Commercial Officer, MAS Holdings India, the country has the opportunity to strengthen its position as one of the world’s leading apparel sourcing destinations by developing a more integrated and innovation-driven manufacturing ecosystem.
India already possesses several competitive advantages, including capabilities across knits, wovens and high-end synthetic activewear and sportswear. Manufacturing hubs such as Gujarat provide a strong fibre and fabric base, while abundant labour, cost competitiveness and government-supported apparel parks continue to support the industry's growth.
However, global brands now expect manufacturers to deliver faster speed-to-market, continuous product innovation and sustainable, compliant operations. End-to-end supply chain transparency, together with stronger in-country vertical integration, has become an increasingly important factor in supplier selection. At the same time, several international brands are making retail operations in India a long-term priority, increasing the importance of sustainable local sourcing.
To compete more effectively with manufacturing hubs such as China, Vietnam and Bangladesh, India needs to accelerate the development of integrated manufacturing ecosystems. According to Raghavan, this requires an incubator-style model where fabrics, trims, packaging, logistics, machine servicing and other supporting services are located close to manufacturing facilities. Such integration can improve operational efficiency, reduce lead times and strengthen overall competitiveness.
One of the industry's immediate challenges is the availability of synthetic fabrics. India currently depends on imports for a significant portion of its synthetic fabric requirements, resulting in longer lead times as well as additional duties and inbound logistics costs. Strengthening domestic production capabilities through targeted investments would help improve the competitiveness of Indian manufacturers.
Technology and innovation are also becoming increasingly important as manufacturers seek to remain competitive. The adoption of advanced manufacturing technologies, modern production processes and continuous product innovation is expected to become a key differentiator. However, many businesses continue to operate using legacy practices, while thin operating margins often delay investments in technology. According to Raghavan, these investments should become part of manufacturers’ long-term growth strategies despite financial constraints.
For MAS Holdings India, success in international markets is closely linked with success in the domestic market. According to Raghavan, manufacturing models developed for efficient and cost-effective production within India can also support export growth. He added that India's domestic market presents significant opportunities, driven by rising income levels, increasing demand for higher-quality products and growing consumer preference for products carrying the 'Made in India' label.
Raghavan also highlighted the importance of collaboration between industry and government in developing a globally competitive textile and apparel ecosystem. He said achieving this objective would require coordinated investment in infrastructure, innovation, sustainability, workforce development, trade facilitation and ease of doing business.
He noted that the Government of India’s progress on multiple Free Trade Agreements (FTAs), along with initiatives such as the PM MITRA Parks, represents an important step towards building integrated manufacturing ecosystems capable of supporting the industry's next phase of expansion.
According to Raghavan, India has the necessary capabilities to emerge as one of the world's leading apparel manufacturing destinations by strengthening vertical integration, investing in technology and synthetic fabric capabilities, developing collaborative manufacturing ecosystems and leveraging both domestic demand and export opportunities.