Recalibrating India’s Textiles and Apparel Exports Strategy
Prof. Dr. Binaya Bhusan Jena
The global apparel and textiles supply chain is shifting from single-country manufacturing to flexible, regional networks due to unpredictable tariffs, trade policies, and geopolitical tensions. Trends like reshoring, nearshoring, and increasing demands for transparency and sustainability are prompting brands to diversify sourcing and reduce reliance on China. India, with 4% of global textiles trade and 25% of textile fibers, is emerging as a key alternative because of its robust infrastructure and skilled workforce. Companies now prioritize supply chain resilience and agility over cost, making India a top "China+1" destination for international brands seeking safer, more adaptable sourcing strategies.
Global supply chains face disruptions from pandemic-related bottlenecks, geopolitical tensions, trade tariffs, and vulnerabilities in key routes like the Red Sea. Relying on a single manufacturing country has become a business risk, especially with rising costs due to trade disputes and political instability. Consumers demand faster fashion cycles, prompting brands to produce closer to markets. Consequently, diversification has shifted from a backup to a core strategy, with brands adopting a portfolio approach across multiple regions to optimize cost, speed, and stability. India emerges as a prime alternative to China, offering an end-to-end textile value chain—from raw cotton to finished garments—without heavy reliance on imported fabrics. As one of the largest cotton producers, India provides sustainable fibers readily available. Government initiatives like the “Five F” vision—covering farm, fiber, factory, fashion, and foreign markets—alongside schemes such as PLI and PM MITRA, are boosting manufacturing capacity and efficiency. Additionally, trade agreements with the EU and UK improve tariff competitiveness, making India an attractive sourcing hub. Given the evolving geopolitical landscape and shifting global business models, India stands out as a promising destination for international apparel sourcing, balancing cost, sustainability, and stability.
To capitalize on this opportunity, India must achieve full vertical integration, adopt agile, transparent, and sustainable supply chains driven by digital transformation, and resolve structural inefficiencies. Significant challenges include automation-driven job displacement. Advanced manufacturing in fabric cutting, sewing, and finishing is progressing faster in Bangladesh, Vietnam, and Cambodia, improving productivity and offsetting wage advantages. If automation accelerates further, India’s traditional labor-cost advantage may diminish. Additionally, Indian apparel units are generally smaller than those in China and Vietnam, limiting economies of scale and quick order fulfillment. Despite raw material advantages, India struggles to turn them into high-value finished garments efficiently. To overcome these hurdles, India should accelerate its "Five F" vision and expand integrated textile-apparel parks aligned with export markets. The PM MITRA Parks scheme is vital for consolidating supply chains and aiming for
$100 billion in exports by 2030. Rapidly operationalizing these parks is crucial to attract supply chain shifts from China driven by rising costs and tariffs, positioning India as a competitive global player.
Global textile and apparel buyers looking at India over other countries due to its comprehensive fiber-to-fashion supply chain and large, stable domestic market. While Vietnam offers quick production and Bangladesh for low cost apparel, India’s key advantage lies in full integration of the entire value chain. Additionally, labor costs in India are significantly lower; for example, the average monthly wage for a sewing machine operator ranges from ₹16,500 to ₹34,000, compared to ₹47,200 to ₹66,200 in China’s primary hubs. This cost advantage, combined with complete supply chain control and diverse raw material options, positions India as the preferred sourcing destination, offering strategic benefits over competing nations. As global buyers seek reliable, cost-effective supplies, India’s unique integration and affordability make it the leading choice.
India has built strong trade ties with key apparel importing nations over the past decade. Under Modi’s leadership, the government actively pursues Free Trade Agreements (FTAs) to boost textile-apparel exports and address tariff disadvantages against competitors like Bangladesh and Vietnam. Currently, India has nine FTAs covering over 38 countries, including the UK and the EU. These agreements provide preferential access to nearly two-thirds of global trade. This strategic focus enhances India’s export potential and positions it favourably in global markets. However, securing deals alone doesn't ensure success. Indian exporters utilize only 20–30% of preferential trade routes, mainly due to high compliance costs and low awareness among MSMEs. Major trade blocs, like the EU, enforce strict standards on environmental and safety compliance, pushing firms toward greener practices.
India's opportunity to benefit from global shifts away from China in apparel sourcing depends on overcoming structural fragmentation and building a strong supply network, supported by initiatives like the PM MITRA Park Scheme. As retailers adopt "China + 1" strategies, India's integrated supply chain—from raw materials to finished goods—can position it as a leading apparel and textiles hub. Achieving $100 billion exports by 2030 requires free trade agreements and resolving structural issues through policy stability, cost control, and sustainability. Focusing on these areas will attract international brands seeking diversified supply chains, enabling India to capitalize on global sourcing trends. Strategic reforms and collaboration are essential to unlock India’s export potential and establish it as a preferred global textiles and apparel hub.
{Dr. Jena is a Professor and Chairperson of the Department of Fashion Management Studies (FMS) at National Institute of Fashion Technology (NIFT) and the former Chairman of Textile Association of India (TAI), Odisha Unit}