A recent economic survey has shed light on the challenges facing India’s textile and apparel industry, revealing a competitive disadvantage compared to global players. Despite the sector’s significant contribution to India’s economy—accounting for 2.3% of GDP, 13% of industrial production, and 12% of exports—Indian manufacturers struggle with higher costs due to complex value chains and a lack of localization.
The survey highlights the streamlined operations of competitor nations like China and Vietnam. These countries boast vertically integrated “fibre-to-fashion” firms, enabling them to export cost-effective products with consistent quality and adapt quickly to evolving industry trends. Simplified customs procedures further enhance their competitive edge.
In contrast, Indian exporters grapple with intricate regulations, including meticulous fabric accounting and pre-shipment inspection certificates, which slow down logistics and inflate costs. The absence of favourable free trade agreements (FTAs) also poses a hurdle. For instance, Indian silk scarves face a substantial tariff in the US, while competitors enjoy zero tariffs due to existing trade pacts.
The survey suggests that India can capitalize on the global shift in apparel demand towards man-made fibres (MMF). While India currently excels in cotton-based products, global demand is surging for MMF-based items, from athleisure wear to technical textiles. Boosting India’s MMF production, currently at 9.2% of the global share, presents a significant opportunity. The report recommends vertical integration, increased investment in research and development, and sustainable production methods to achieve parity with international quality standards.
While recognizing the sector’s potential, the survey emphasizes the need to lower production costs and expand India’s MMF market share. This requires greater investment in research, vertical integration, and adherence to international quality and sustainability benchmarks. Simplifying, consolidating, and eliminating bureaucratic processes are crucial, as these currently strain exporters’ resources. Addressing these issues will reduce costs, alleviate burdens, and boost competitiveness in the global textile market.
