Indias Textiles Ministry has ambitious plans for the countrys textile and clothing industry

India's Textiles Ministry has ambitious plans for the country's textile and clothing industry

The trouble with public announcements about ambitious garment industry plans is that it's not always clear anymore whether they are cynical headline-fodder - or not. 

Obviously a lot of them still are. There was a fascinating story behind a claim on 1 August from spokespeople for the president of Zambia that centred on the country's long-closed Zambia China Mulungushi Textile (ZCMT) plant, a Cold War invention of the Chinese and Zambian governments.

A Tanzanian entrepreneur, they said, was about to invest "a total of US$59m in the next three years in the existing plant and in a denim plant with a 20m metres production capacity per annum."

In fact, Mohammed Dewji - whose rise to one of Africa's 50 richest people is partly due to turning round long-defunct garment and textile plants in Tanzania and Mozambique - had simply announced he would start a three-month assessment of the plant, with a view to investing $10m in its development.

He's prepared to look at relaunching a factory where China's Quingdao Textiles (still its 66% owner, apparently) has failed twice and isn't prepared to try again. But Dewji didn't get rich by committing millions, unseen, to an operation where much of the machinery might have rusted away to uselessness.

Such instant exaggeration seems common whenever the Chinese get involved in operations outside China.

  • Three weeks earlier, in Rwanda, the government announced C&H Garments, a company run by two Chinese businesswomen, would set up a 200-employee garment factory in its Kigali Special Economic Zone. Within 24 hours, C&H CEO Helen Hai was talking about "employing more than 30,000 in the next five years" - more than any textile factory in Africa - and the press had invented another "massive Chinese plan."
  • In 2012, when running an Ethiopian plant for Wenzhou Huajian Shoes, Hai had forecast a 200,000 employee "Shoe City" in Ethiopia. Huajian's worldwide president, Zhang Huarong, now prefers to forget that as he struggles with the "widespread inefficiency" he's found in Ethiopia's bureaucracy, worker productivity that is only a third of China's, transport costs up to four times their Chinese level, and roads requiring two hours to drive the 30 kilometres from his factory to Ethiopia's capital, Addis Ababa.
  • In Pakistan's Punjab province, local government has been boasting all year of the "250,000" textile and garment jobs likely to be created at a factory zone it believed China's Shandong Ruyi was going to pay for. But with the company reportedly not following agreed time plans, and project management now in the hands of government controlled organisations, the boasting has cooled down.
  • The Bangladesh government keeps claiming its success in getting finance from Orient International, an apparently government-controlled Chinese firm to fund its garment factories' relocation to safer sites. Actually, Orient has simply agreed to a feasibility study this year into moving 500-600 factories, then (if the study proves positive) to put up around $1.2bn for one industrial zone, to be repaid as garment makers move in in about four years' time. Orient's role is important - but it's just one bit of the enormous task of finding safe locations for thousands of factories, helping each factory fund its move, and ensuring safety at their current sites while all this is going on.

Success in developing a major garment sourcing base needs far more than a few big numbers. The expectations raised in Zambia, Ethiopia, Pakistan and Bangladesh may be achieved one day - but only with prudent management, the right facilities, the right transport, a properly trained, motivated - and therefore remunerated - workforce, and with business plans that understand the market they're aiming at.

It's easy, though, for business-people's ego or local politicians' need for a favourable headline to arouse expectations that may never materialise.

India's garment vision
But I think there's a more worrying explanation for what must be the least-believable ambitious garment plans ever.

"There is no reason," says the Indian Textiles Ministry in the "Vision Strategy Action Plan" it published on 4 August, "why India, provided it takes the necessary steps, cannot achieve 20% [annual dollar] growth in [textile and garment] exports" between now and 2025, increasing its share of global imports (especially of apparel and household textiles) four-fold, and taking its textile exports up to $300bn from their current $39bn.

"There is. That's twice the growth rate China and Bangladesh managed for their apparel exports in the decade between 2000 and 2010 - a period in which the West dismantled its restrictions on garment and textile imports, and virtually moved its entire garment-making industry offshore.

That move has happened. It is a lot tougher to compete in the worldwide textile industry now than ten years ago - and it'll be tougher still in a decade.

  • The Vision still needs more yarn exports. The next decade's growth is likely to come from worker-free plants in countries like the US with low energy and real estate costs.
  • The Vision still needs growth in fabric exports. But by 2020, major buyers want suppliers to guarantee a complete absence of toxic emissions that India's current mills and dyeworks just aren't capable of.
  • 20% growth in apparel exports means continuing growth in exports to North America and Europe - markets in which India is still losing share to other developing countries.
  • China, despite its high wages, continues to dominate garment making, because of its productivity miracle. The Vision's response? "Ministry of Textiles should develop a credible mechanism for assessing and tracking improvements in quality and productivity." A country's businesses expect civil servants to tell them how to match their foreign competition?

India badly needs the 35m new jobs the Vision's authors believe their plan will create, and the garment industry is the most promising place to create them. But the Vision reads like a set a numbers concocted by civil servants to produce a spreadsheet other civil servants will find comforting.

There's not a shred of evidence anyone's thought about the real commercial problems India's exporters are going to meet in the markets they need to sell to. And it tells us a lot that India's Textile Ministry in its requests for comments, says it doesn't want any from potential foreign customers.

The visionary behind the first company I worked for after graduation had a motto: "When you reach for the stars you may not get one, but you won't come up with a handful of mud." But you won't come up with anything if you don't understand your market.

At Zambia's ZCMT it has taken decades for an African entrepreneur to turn a 30-year-old government-created vision into sustainable jobs. This has meant 30 years of poverty for thousands.

India can't afford to wait another 30 years before its poor start benefitting from an industry that's transformed the lives of most Chinese.

Whether they're interested in your views or not, read the Vision here and send your comments to vision-mot@nic.in.