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
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.