1_OVERVIEW: India s Cotton industry  emerged  as No 1 with  2019 cotton output of 34.5 million bales,yet its  losing its  share in the  global textile & clothing markets consistently to big competitors like B.Desh and Vietnam and,other  new  emerging competitors esp. like Egypt, Morocco, Ethiopia, Cambodia for apparels.Though,India  today is no. 2  in the global  T & C market share, but it remains a poor 4.5% share holder in global trade of $1500 Billions.

It is  in this perspective, and  for India to improve upon and/or maintain its  current global T & C share of atleast 5% ,it is important to understand and improve its `competitive` matrix  and key drivers  that can either mitigate the competition or improve India s severely constrained positioning.These  pro and con factors  have been  reviewed in summary below;

2_Sectoral Analysis – Increased Competitiveness of other key  Countries

A] Textiles  sector

For the core  Textile sector, the countries enjoying the majority of trade include China, India, Bangladesh, Vietnam and Turkey. Their positioning  and current status of the top 5 exporting  countries is as summarised in table below:

COUNTRY                         2018 Export,$ Bln.                      %Change 2010-18  

1.China incl. HkKg                       126                                      +8%

  1. India                                       18                                       +4%
  2. Turkey                                     12                                        +4%
  3. Vietnam                                  08                                        +13%
  • Turkey  remains a key competitor and has benefit of `near to shore` to EU
  • Vietnam is a serious challenger considering its `Duty Free `pacts for price competitive access to  the  biggest markets of US and EU. In view of no  dedicated  FTA/trade pacts with USA,EU; India is losing constantly to Vietnam. Also,China is feeding both Vietnam and Cambodia for materials.

2 B] Apparel & Madeups  Sector

For the Apparel/clothing  and madeups sector, the countries enjoying the majority of global trade pie include China, India, Bangladesh, Vietnam ,Cambodia and Turkey. Their positioning  and current status of these top 6 exporting  countries is as summarised in table below:

COUNTRY                         2018 Export,$ Bln.                   %Change 2010-18  

1.China ,excl. HkKg                       158                                     0

2. India                                         17                                   -11%

3. Turkey                                      16                                    +4%

4. Vietnam                                    32                                    +13

5. Bangladesh                               32                                    +11%

6. Cambodia                                  8                                      +14%

  • By  end of  2019, Vietnam had taken no. 1 position with $38+bln.
  •  Both Vietnam and Cambodia ,along with  B Desh and Turkey are  new serious and larger threats to India s  already declining share vis a vis their  Duty Free pacts for free and  price competitive markets access to  the  biggest markets of US and EU.
  • Textile  sector overall is in serious decline for both India,and China  and global pie is being taken away by above competitors  as also new emerging and `Near to shore` countries eg Kenya,Ethiopia ,Jordon,Egypt,Morocco & east Europe eg Romania,Poland etc.

3_Competitive and emerging Trends  vis a vis  India’s future global positioning to be for Textile  & Clothing  export sectors.

It  is  important  and critical for T & C industry captains and the Govt. bodies to  understand India s  threat perceptions  and quickly work out the ways and factors to mitigate and to face the strong and growing headwinds of completion from other Textile countries vis  a vis  some of the  key attributes and factors that apply currently to India.

•  India T&C sectors  – Weakest link is manufacturing of higher quality fabrics due to absence of `modern` weaving and processing,

•  Diminishing competitiveness of  India’s garment and made ups sub sectors ,due mainly to lower productivity and higher Inputs costs,leading to serious decline in the export value for last 5 years

•  Key drivers of such fall in export value of India s overall T&C products are mainly perceived  on account of:-

o High transaction cost leading to non competitive pricing of basic volume based textiles

o High power and interest burden faced by MSME units  and,also the core textile manufacturing mills

o Overall neglect of global standards of productivity, quality control and new Sustainability paradigms,

o India’s motherly and out of sync treatment of `Cotton` sector is now witnessing a declining global markets share versus synthetic and blends. This has created low profile for India in volume based Polyester textile chain where India has one of the largest polyester,and even viscose fiber outputs.

4: ROAD MAO AND WAY FORWARD TO MITIGATE COMPETION

  • Besides acute need of  major FTA pacts  with USA  and  EU, the Indian textile and apparel industry needs a major shift into manufacturing of value adding fabrics by way of improving its design and new product development, capabilities, and garments of such designed fabrics, and with focus on Polyester to enable exporters to cater to demand all year around. India has adequate capacities for all Synthetic fibers such as Polyester, viscose and others and  can easily compete  with synthetics  focused countries like China, Indonesia, S Korea and Turkey too.
  • Once the new export orders for season Summer-Spring 2021 start flowing in, iled, it is of paramount importance to reduce time to market especially in view of post Covid-19 preference of International brands for their new preference for `Near-shore sourcing. For Apparel exports, India thus needs to compete for right  product price parity  and quick delivery time vis-a-vis existing competitors like Turkey, Egypt , Morocco, and new fast evolving competition from N.African players like Morocco,Jordon, Ethiopia ,Lesotho Kenya,and soon Egypt and Nigeria in 5 years.

By: Munish Tyagi.Intl Textile Industry Consultant

Email : [email protected]