Scale matters

Compliments for the excellent editorial “Missing the boat, again” (July 11); this should serve as a warning to the government — and more importantly the exporting community — to get their act together.

Apparel exports have always been one of the most prominent contributors to India’s overall export effort. Yet, we have not really got where our “potential” could have taken us to. The fault lies more with the exporters and a little less at the government’s doorstep. We have allowed small countries like Sri Lanka, Bangladesh and Vietnam get ahead of us and often taken umbrage under falsecomfort excuses. The Clothing Manufacturers Association Of India has got to be joking when they raise this bogey because Vietnam, Bangladesh and Sri Lanka also export to the same markets and they have all registered growth against our dismal decline. How have these countries become more competitive?

One of our biggest drawbacks -- as you have pointed out — is the small scale of Indian factories. Despite our early bird advantage in apparel exports and our creativity, we have been left behind because the demand patterns have undergone a sea change and we do not enjoy the economies of scale that our competitors do. Apparel exporters in India have largely remained owner run and managed personalised enterprises and very few have really moved up the ladder and corporatised their businesses. Most owners still handle their factories like small family businesses and are comfortable about the superficial advantages they enjoy.

Some temporary setbacks due to the Goods and Services Tax notwithstanding, the big thing for exporters would be to (a) scale up and significantly upgrade their production infrastructure; (b) professionalise management; (c) follow all the laws and gun for regaining the top slot once again. Some of them may decide to remain boutique exporters with greater flexibility in creating new styles but most have to stress on volumes and flawless quality.

Krishan Kalra Gurugram