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NEW DELHI: At a time when there are concerns over the Bangladesh garment industry, a US International Trade Commission (ITC) has said that American buyers have identified political stability in India as a key factor for sourcing apparel from the country.
“Brands are more willing to source high-value or fashion items from India compared to less politically stable countries, as they are confident they will be able to produce and receive their products,” it said.Domestic industry is upbeat about the sector going forward and expects more orders to flow to Indian players, for whom 80 per cent production is targeted at the local market, according to the US ITC report.
Indian industry as well as the American agency have identified capacity challenges to supply more garments.
US ITC has given an all-clear to India, which was among “profiled country” along with Bangladesh, Pakistan, Indonesia and Cambodia, which along with Vietnam gained market share from China during the last decade.
While China’s market share in US apparel imports dropped from 37.7 per cent in 2013 to 21.3 per cent in 2023, India’s rose from 4 per cent to 5.8 per cent , with exports of $4.6 billon last year to be the fourth largest supplier to Americans. Vietnam emerged the biggest beneficiary increasing its share of the pie to 17.8 per cent from 10 per cent a decade ago. At $4.6 billon, the US was India’s largest export destination for apparel with almost one-third of the shipments headed there. While the US ITC report has recognised India’s competitiveness, thanks to extensive vertical integration – especially cotton garments and high value-added products – as most inputs are available domestically, rising labour cost, small size of units and high logistics cost have been identified as challenges. “…some brands indicate that India is well developed for cotton products, but not MMF (man made fibre) goods, which has limited increased sourcing from the country,” it said.
The industry is upbeat. “Indian textile and apparel industry has long been a victim of negative perception. USITC study has busted this myth by projecting the Indian apparel industry as one specialising in high value-added products, requiring high-skill levels and with highest degree of reliability, mitigating risk of supply chain disruptions on account of having the production capabilities to manufacture all items in the value chain… It is heartening to note that for determining export competitiveness USITC did not rely on cost criteria alone and chose to factor in important parameters like reliability of supply and product differentiation. India fares extremely well on both these counts,” said Mithileshwar Thakur, secretary general at AEPC, which represented Indian industry at the hearings.
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