Tiruppur’s textile industry booms with US & UK Orders amid Bangladesh instability
In FY24, Tiruppur generated a revenue of Rs 350 billion, which is expected to rise to Rs 400 billion in FY25.
Tirupur, India’s textile hub, is witnessing a revival after nearly two years, with a surge in orders from the US and UK, partly due to political instability in neighbouring Bangladesh. As a result, the city’s 5,000 apparel export units are now operating at 95 per cent capacity.
K M Subramanian, president of the Tirupur Exporters Association (TEA), stated that new apparel buyers from the UK are requesting samples in anticipation of a potential Free Trade Agreement (FTA) between India and the UK. Last week, the Union commerce ministry announced that talks on the FTA would resume early next year.
Subramanian mentioned that the units are receiving orders from the US for the upcoming Spring season. A few months ago, these units were operating at 60-65 per cent capacity, but the situation has since improved.
He also noted that several US-based companies that previously sourced from Bangladesh are now turning to Indian suppliers.
In FY24, Tiruppur generated a revenue of Rs 350 billion, which is expected to rise to Rs 400 billion in FY25.
India’s apparel exports saw a 35 per cent increase in October, reaching $1.22 billion, compared to $908.78 million in the same month last year, according to the commerce ministry.
Punit Lalbhai, vice chairman and executive director of Arvind, explained in the company’s Q2 earnings call that the demand for garments is strong, and India is emerging as a preferred sourcing destination. He emphasised that any credible garment player with capacity is likely to be fully booked.
Sanjay Jain, chairman of the Indian Chamber of Commerce National Committee on Textiles, pointed out that the US had significantly reduced garment imports after the pandemic. He added that the US garment pipeline is now shallow, and fresh orders are being placed. Some orders are also coming from Bangladesh due to on-going political unrest. Jain anticipates apparel exports will reach $18.5-$19 billion in FY25, up from $16 billion in FY24, and the growth momentum will likely continue for at least two years.
Sudhir Dhingra, owner of Orient Craft, a Gurugram-based exporter, observed that while orders intended for Bangladesh are being redirected to India, many Indian textile manufacturers lack the infrastructure to handle large orders. He noted that larger companies could manage the orders, but smaller units might struggle. Dhingra suggested that the Indian apparel industry could capitalise on the opportunity from Bangladesh if the government provides incentives such as the Production Linked Incentive (PLI) scheme and banks offer working capital loans to smaller units.
Lalbhai further remarked that Vietnam and Bangladesh were approaching saturation, making India an attractive alternative for diversification, especially due to the ongoing unrest in Bangladesh.
Sivaramakrishnan Ganapathi, vice chairman and managing director of Gokaldas Exports, expressed optimism about the India-UK FTA. He mentioned that the company is already working with UK-based clients, anticipating an increase in their sourcing from India. He added that even UK customers, who currently benefit from a 12 per cent duty advantage from Bangladesh’s duty-free status, are looking to outsource more from India. Ganapathi believes that this trend will accelerate if the FTA is finalised.
Ganapathi also noted that US apparel imports are on the rise after a period of excess inventory. Brands, having liquidated their surplus stock, have started purchasing again.
