The industry is still distant from being classified as highly technologically advanced

The Clothing Manufacturers Association Of India (CMAI) is the pioneer and most representative Association of the Indian apparel industry for over five decades. It has a membership base of over 20,000 companies, including readymade garment manufacturers, exporters, retailers and ancillary industry. With its headquarter in Mumbai, CMAI also has branches in New Delhi, Bengaluru and Pune. Rahul Mehta, Chief Mentor, CMAI, addresses the current scenario of the Indian apparel industry in this conversation with Divya Shetty.

How has the global apparel industry evolved over the years?

Over the years, it is evident that major production activities have transitioned from high-cost economies to those with lower production costs. This shift is particularly noticeable in the manufacturing sector, which was historically concentrated in the United States and Europe but has gradually migrated to nations offering more cost-effective labour, such as India, Pakistan, Bangladesh, and China. This pattern continues to evolve, with current trends indicating a movement of production away from India and China toward countries like Bangladesh, Myanmar, and various African nations. This on-going process is largely driven by the labour-intensive nature of the industry and its heightened competitiveness and price sensitivity.

Nonetheless, there is a noteworthy counter-trend referred to as ‘reshoring,’ which involves the relocation of production facilities closer to consumer markets. This shift is motivated by the growing unpredictability and competitiveness of these markets, prompting retailers to reduce the time between order placement and product availability in stores. Consequently, they seek to localise manufacturing to minimise freight times and reduce delays in delivering goods to consumers.

Another noteworthy transformation in this industry is the increasing integration of technology. Although the apparel sector remains largely labour-intensive, there is a noticeable infusion of advanced equipment and machinery aimed at reducing labour dependency and enhancing productivity. Despite this technological evolution, the industry is still distant from being classified as highly technologically advanced. Even in the textile sector, where labour input remains relatively low, technology is gradually assuming a more prominent role. For instance, the introduction of robots into manufacturing processes is a clear example of this technological progression.

What are the major trends you’re witnessing currently?
One notable development pertains to the reduction in lead times. Secondly, the traditional distinction between two seasonal periods, namely summer and autumn-winter, is undergoing a transformation. The conventional notion of seasons is diminishing in significance, with a growing number of retailers adopting a strategy of introducing new product ranges every two months, monthly, or quarterly, contingent upon the brand’s overarching approach. This constitutes another noteworthy evolution within the industry.

On the market front, a distinct trend is observed, particularly in warmer climates, where casual attire is gaining broader acceptance as the standard mode of dress, even within corporate organisations. This shift is also discernible in Western cultures, where the concept of “Friday dressing” permits the wearing of jeans and t-shirts. Nevertheless, in certain sectors such as banking and specific financial industries, formal suits remain the prevailing attire. Nonetheless, there is a discernible inclination, especially in the United States, toward adopting more casual dress codes.

A third prevailing trend is the continued dominance of polyester-based garments, particularly those derived from MMF (Man-Made Fibre) materials, in the global apparel landscape. Estimates suggest that approximately 65 per cent of the total world trade in garments consists of MMF-based products.

And so could you elaborate on the challenges and opportunities, as well as the opportunities for textile exports today from India? 

I believe the opportunities are immense because we currently possess only approximately 4 per cent of the global market share. Furthermore, there are significant gaps in our presence within various product categories. For instance, formal wear, performance wear, athleisure, sportswear, and winter wear are segments where our presence is minimal. Consequently, there is considerable growth potential in these product categories.

However, several challenges need addressing. Firstly, a substantial portion, approximately 70-75 percent, of our exports rely on cotton-based materials. Shifting the focus towards polyester or MMF-based garments will require significant efforts from both the government and the industry, presenting a notable challenge.

Secondly, the availability of polyester raw materials remains limited and costly, adding to our challenges.

The third challenge pertains to our inability to compete with countries that enjoy duty-free access to certain markets, such as Europe, where Bangladesh holds an advantage due to duty concessions. Additionally, our production costs are increasing as our economy experiences healthy growth, resulting in a gradual shift away from price-sensitive segments in global trade.

Lastly, our productivity remains significantly lower compared to countries like China, Bangladesh, and Vietnam, whether attributed to labor laws or cultural factors. This productivity gap poses yet another challenge that requires attention.

What role does CMAI play in supporting local apparel manufacturers? 

In two or three different ways, firstly, we conduct garment fairs that serve as the most expansive platform for establishing connections within the retail market of the nation. These encompass both our national garment fairs and, more recently, our regional garment fairs. Both of these events have garnered significant acclaim, with over 1100-1200 brands participating and more than 35,000 retailers in attendance. This represents an exceptionally effective means of engaging with the market.

Secondly, on the complementary side, we host fabric, accessories, and related fairs, facilitating direct interaction for our manufacturers with nearly 300 suppliers of fabrics, accessories, and other essential materials. This service further bolsters our support to manufacturers.

Thirdly, we administer a conciliation and arbitration process, which aids our members in resolving disputes with their clientele. Annually, we collect substantial sums for the industry and assist in the recovery of such amounts. This constitutes another significant service we offer.

Furthermore, we conduct on-going knowledge-sharing sessions where industry experts are invited to address various facets of conducting business. Additionally, we maintain a consistent dialogue and collaboration with governmental entities to ensure the formulation of optimal industry policies.

Our most recent endeavour is the Brands of India show in Dubai, a ground-breaking initiative aimed at promoting Indian brands in the global market. This marks the first organised effort to showcase Indian brands internationally, a departure from the previous focus on exports under buyer labels. This is a pivotal initiative undertaken by CMAI.

Can you highlight any successful initiatives your association has undertaken to enhance the competitiveness of the textile industry at the global level recently? 

In terms of global markets, Brands of India is the first major initiative because otherwise, we have always been focusing on the domestic market. But there again, under the government scheme, we have trained 45,000 workers for our industry. So that has obviously helped them. As I said, we keep having these knowledge-sharing sessions which help them to improve their competitiveness and their efficiencies. 

How does CMAI foster sustainability within the apparel industry? 
Sustainability, as you are aware, is a relatively recent concept that has gained increasing prominence. In response, we have undertaken a significant initiative known as Su.Re, which stands for Sustainable Resolution. This resolution has been endorsed by prominent brands, committing to the transformation of their raw materials, processes, and products into more sustainable alternatives. Notably, Su.Re was inaugurated by Smriti Irani, the former Minister of Textiles, in 2019. While the initiative experienced some setbacks due to the COVID-19 pandemic, efforts are underway to revive it. Additionally, we are actively engaged in the Ministry of Textiles’ ESG Task Force, which focuses on Environment, Social, and Governance aspects, thus spearheading the sustainability drive within the domestic sector.