THE RISE & FALL IN­DIA’S AP­PAREL SEC­TOR

The In­dian gar­ment ex­port in­dus­try has been fac­ing a con­sis­tent de­cline over the last few years.the share of In­dia in the global gar­ment ex­port mar­ket has not risen since 1994, as ob­serves a study pub­lished by K V Ra­maswamy, the Pro­fes­sor of Eco­nomics at

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Although In­dia holds a dom­i­nat­ing po­si­tion in the tex­tile ex­port mar­ket, its to­tal share in the gar­ment and ap­parel ex­port mar­ket sings a dif­fer­ent tune. The na­tion has failed to un­leash its po­ten­tial de­spite the avail­abil­ity of skilled labour at cheap cost and hav­ing com­plete value chain re­quired for the in­dus­try to flour­ish.

In­dian tex­tile and ap­parel ex­ports stands high­est with EU at 19 per cent and USA at 18 per cent, fol­lowed by UAE, China, and Bangladesh at 9, 8, and 5 per cent, re­spec­tively. Low cost labour is one rea­son for this sta­tis­tics. Although In­dia has higher wage costs than Bangladesh, it is still lower than China and Viet­nam.

The re­cent changes in the Chi­nese gar­ment ex­port mar­ket have ben­e­fited some smaller play­ers, as the coun­try has an added ad­van­tage of hav­ing low cost of power, land, and labour. Con­se­quently, Europe and United States have ex­tended trade ac­cess ar­range­ments of their mar­kets to emerg­ing man­u­fac­tur­ing hubs like Ethiopia, Viet­nam, Myan­mar, and Kenya.

Var­i­ous re­search stud­ies con­firm that the up­heaval in the fab­ric pro­duc­tion in In­dia has been con­tin­u­ing with a de­cline of 1 per cent in the first quar­ter of 2018 due to the tran­si­tion to GST. Be­sides, the sec­tor suf­fered dis­rup­tions due to de­mon­eti­sa­tion pre­ceded by 2 per cent neg­a­tive growth in 2017 and with flat pro­duc­tion in 2016.

Fi­bre and fil­a­ment cat­e­gory used to have the high­est growth in In­dia’s ex­port of tex­tile and ap­parel with a Com­pound An­nual Growth Rate

(CAGR) of 13 per cent ex­ports, but these are also go­ing down­wards since 2011-12.

The in­dus­try also feels that the with­drawal of cer­tain tax ex­emp­tions and fis­cal ben­e­fits ear­lier granted by the Min­istry of Fi­nance have al­ready ad­versely af­fected the ex­port per­for­mance and re­duced com­pet­i­tive­ness of In­dian gar­ment ex­porters in the in­ter­na­tional mar­ket.

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