Our exporters can put the ‘Made in India’ tag as a symbol of premium quality
Amidst industry upheavals, Gurudas Aras, Strategic Advisor and Independent Director, delves into the reasons behind the turmoil and offers suggestions on achieving the $100 billion export target.
What are the challenges before Indian textile and apparel (T&A) manufacturers as they seek to increase their global market share?
The Indian textile Industry is undergoing challenging times at present due to the contraction in demand, geopolitical troubles like the two major wars and the Red Sea trouble for shipping of export goods. The government has set an ambitious target of $ 350 billion market size for 2030 out of which $ 100 billion will be exports (from the present $ 40 billion. These numbers are quite challenging looking at the present situation and the challenges in front of the Indian textile industry. Due to the global demand contraction, the exports have got affected in the last 2 years. The industry is also facing under-utilisation of capacity because of the same. Also, there is an over capacity situation in spinning due to fall in yarn exports to China and Bangladesh over a year now. Due to dominance of cotton-based products than synthetic based, the export landscape also looks limited for the Indian manufacturers in the near term.
Have government policies/schemes of the last few years helped in increasing exports? What else can the government do to achieve the $100 billion export target? Can India achieve $ 100 billion T&A export target (if yes, by when)?
Achieving $ 100 billion export target looks quite challenging as of now where present textile exports stand at $ 40 billion. Schemes like ROSCTL have so far helped the textile exporters increase their exports. The schemes like PLI and PM Mitra etc will help in creating capacities which can be world class and can compete globally. However, the existing industry is finding itself weak in global competitiveness due to higher costs, inconsistent quality, and delivery bottlenecks.
If India must achieve $ 100 billion export target, then following actions are required to be taken.
⦁ Focusing on enhancing competitiveness
⦁ Attaining best manufacturing practices for quality enhancement
⦁ Strengthening the textile value chain with cluster approach
⦁ Increased focus on MMF based products and technical textiles through new investments
⦁ Embracing sustainability, circularity, and traceability in the supply chain
⦁ Leveraging the government schemes and the FTAs to the best advantage
Globally, climate change has been gaining center stage in recent years. Is it a challenge or an opportunity for Indian T&A exporters? Have Indian T&A manufacturers been successful in incorporating sustainable practices to enhance overall exports?
In the recently held COP28 conference the intention was made clear about dealing effectively with the climate change from reducing greenhouse gas emissions, to strengthening resilience to a changing climate, to getting the financial and technological support to vulnerable nations. Also with the SDG goals deadline fast approaching, the industry will have to prepare itself sooner than later, especially since the textile industry is the most polluting industry in the world. While some clusters and the industry players have already taken steps in this direction many are still unprepared for this forthcoming challenge.
The Indian Government in collaboration with UNEP has successfully implemented a project to minimise the negative environmental impacts of Indian Textiles by promoting sustainable practices and mainstreaming knowledge on circular production-based practices in the textiles and apparel sectors.
While climate change is a challenge for the textile exporters it will also offer an opportunity for increasing exports if the industry can take steps to comply with the sustainability requirements.
In the entire T&A value chain – from raw materials (cotton, MMF, etc) to end-products (garments, fabric, home textiles) to technical textiles – which segment/s offer high-export potential/opportunity? Which are emerging segments that need to be tapped to expand exports?
The highest potential for increasing India’s exports is in Man-made fibre (MMF) based products and Technical Textiles. The global MMF Apparel export market size is $ 240 billion which forms 52% of the total global apparel trade. India’s share in the global MMF apparel exports is mere 2%. India, so far being cotton centric in its export products, failed to increase its market share beyond 5% in T&A global trade. Majority of the global textile trade happens in MMF and its blends where India has been traditionally a non-serious contender. India needs to diversify its product basket by including many MMF based products like winter jackets, sportwear and athleisure wear and MMF based knit goods etc.
Indian textile and apparel (T&A) exporters need to look beyond US and EU markets, especially to the markets like Japan, Australia, and UAE where the FTAs are already existing. In Japanese market India’s share in apparel imports is 1% while in Australia its 5%. This shows the immense potential and opportunities that exist in these markets for the Indian T&A exporters.
In technical textiles there is immense scope for manufacturing import substitute products and enhancing the exports in many of the categories like medical, automotive, industrial, and geo-textiles.
Indian home textile manufacturers have garnered 54% of the US market by their strong quality adherence, market development efforts and dynamic approach towards consumer preferences. Their business model can be the best example for the apparel exporters to emulate and follow.
How important is quality to be a part of the supply chain of multinational brands (or buying houses)? Has enough been done by the government and industry to improve quality and export-competitiveness of the Indian T&A industry?
Quality has always been a particularly crucial factor in the global T&A trade. India fails the test of consistent quality which is one of the reasons for the muted export growth. In Indian textile manufacturing there is no strict quality culture of zero-defects. One of the success factors of China has been delivering consistent quality at reasonable cost. Indian suppliers fail in delivering consistency in quality and for that a paradigm shift is necessary in the manufacturing approach towards making the products of “perfect quality the very first time’’. The industry also needs to develop stringent quality norms and have a total non-tolerance towards quality failures.
Understanding and meeting quality standards is not enough. To harness the potential of the international markets, garment manufacturers need a proactive approach by staying updated with evolving consumer preferences. Developing innovative materials, setting up advanced manufacturing processes, and integrating innovative technologies contribute immensely to consistently making quality products. Government is doing its part by introducing schemes for skilling of workers which can go a long way in creating manufacturing and quality excellence. Similarly schemes like Cotton technology mission will help in improving the quality of raw materials.
How best can Indian T&A exporters prepare themselves for a highly uncertain global marketplace?
The global textile market landscape offers immense opportunities for the Indian T&A exporters. The industry must seriously analyse the present weaknesses due to which they have been consistently unsuccessful in increasing their share in the global textile exports trade. The major weaknesses which I see are the lack of cost-competitiveness, lack of quality culture, over-dependence on cotton-based products, not adhering to the best manufacturing practices, not understanding the changing trends and consumer preferences in the importing countries. The textile value chain needs to work together as one team to overcome these weaknesses. Sighting the factors responsible for China’s dominance in T&A trade, we need to work seriously on finding the gaps and taking measures to fill them with team efforts. Wherever required, the government will play the role of facilitator, but the on-ground battle will have to be fought by the manufacturers and exporters together.
With the right approach and commitment to quality, Indian apparel exporters are well poised to gain higher market share in the established markets like US and EU while prepare to penetrate in the unexplored markets like Japan and Australia as well. By embracing right mindset and committing to excellence, the Indian T&A exporters can establish the “Made in India’’ tag as a symbol of premium quality and trust globally.
Manufacturers may also consider acquiring internationally recognised certifications like OEKO-TEX, WRAP, or GOTS dedicated to promoting sustainable and ethical practices in textile manufacturing. These certifications will serve as global recognition of the exporter’s commitment to superior quality and responsible manufacturing.
