India’s apparel exports to double in five years

Himanshu Vatsa | The Dollar Business

India’s apparel export is likely to meet its target of $18 billion during the current financial year and expected to be double in the next five years, say industry experts. According to the government data, the export of clothing and apparel items reached $16.8 billion last year, registering 12% growth year-on-year. Clothing Manufacturing Association of India (CMAI) has estimated that the industry will be able to achieve its export target of $18 billion this year. Indian exporters face tough competition from China, Bangladesh, Vietnam and other countries having cheaper manpower. But experts say that increasing labour costs in these countries will favour Indian exporters in the coming years. Exporters also hope to earn better profit due to increasing dollar value against rupee. “Since rupee is getting weaker, we can hope for higher margin from exports. But there is nothing to cheer about it. Even though the country has a lot of potential, we have a long way to go. Exports can be doubled if we upgrade our infrastructure,” said Subodh Jain, Managing Director of Niryat-Sam Apparels (India) Ltd. Those in the garment business say that meeting the annual export target of $18 billion is not a big deal. The sector has more growth potential but needs much more attention from the government. “Main challenges before Indian exporters are less productivity, difficulties in procurement of raw material and high transition cots. The potential is much more but that can be utilised if the government support system is good. For example, the cost of transporting containers from Delhi to Mumbai is costlier than that of Mumbai to Europe,” Jain told The Dollar Business. Apart from having more skilled manpower, the availabilty of fabric and embellishments like buttons, cofflinks required for a finished product can provide competitive advantage to Indian garment exporters. But the potential is not fully utilised in the absence of government support, say experts. The global apparel trade is estimated to be more than $400 billion. While India, Bangladesh, China, Pakistan and Vietnam are major exporters, European countries, the US, UAE and Japan are key buyers of readymade garments.  

June 19, 2015 | 06:06 pm IST.