India’s readymade garment sector saw exports decline over 10% in the first six months of its 2018 fiscal year, weighed down by competition from rival exporting countries and a lack of favourable trade agreements.
In the April to September period, readymade garments slid 10.7% to 52,814 crore (US$7.19bn) from the corresponding period in the prior year, according to India’s Tribune.
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Apparel Export Promotion Council (AEPC) chairman, HKL Magu, told the publication the decline was down to a number of factors, namely a decline in the global apparel trade, and stiff competition from countries like Bangladesh, Vietnam and Cambodia.
“What is worrisome for us is that the exports from Bangladesh grew by 15%,” he told The Tribune. “Compared to India, products manufactured in Bangladesh are 10% cheaper. Also, Bangladesh has an FTA with the EU. But, there is a duty of 10% on readymade garments manufactured in India.”
Countries such as Bangladesh, Pakistan, Sri Lanka, and Vietnam enjoy a duty advantage of 9.6% in major European markets.
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For the month of September, India’s readymade garment exports slumped by 26% to 7,968 crore as a result of higher input costs and the lack of favourable trade agreements for major global markets. The decline comes just a month after the Government raised import duties on over 300 textile items in a bid to protect the domestic industry.
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By GlobalDataAccording to an overview of India on re:source by just-style, the new online strategic planning tool, the country is the world’s fourth largest garment exporter and the second largest supplier of textiles. It is also the world’s largest producer of cotton.
The country benefits from a huge pool of low-cost workers and efforts are underway to diversify its garment offering, including government incentives and support policies to generate jobs and boost exports. However, India’s garment shipments are around one-tenth of China’s, and growth lags behind smaller countries like Bangladesh and Vietnam. Customers also complain of long lead times, poor quality, the difficulty of doing business, and unreliability. The country remains a marginal player largely because of the difficulty in importing fabric for cold weather garments.
