India’s apparel export losing to smaller competitors

Vietnam has already overtaken India in terms of supplies to the US (at $5.9 billion in value terms).

Written by Anil Sasi | New Delhi | Published: April 6, 2012 1:03:45 am

In the high-margin global export market for apparel,India is being creamed by competitors such as Vietnam,Indonesia,Bangladesh. While China’s hold over the US and the EU markets is loosening,India,which was widely seen as in the best position to capitalise on China’s lost market share,is increasingly being relegated to the position of a supplier of intermediate products to other successful garment exporting countries.

In both these key markets,which account for over 80 per cent of the textile and clothing exports from the country,India’s main growth comes from textile supplies,which include intermediates such as yarn,fabric and made-ups. In the high-value clothing and apparel segment,India’s growth clearly trails all of its other Asian rivals.

This is evident from the fact that Vietnam,Bangladesh and Indonesia grew much faster than India in terms of supplies to the US market. Vietnam has already overtaken India in terms of supplies to the US (at $5.9 billion in value terms). Indonesia,which was not present in the top-five list just three year back,is now snapping at India’s heels while Bangladesh is not too far behind.

In the EU market,India was a distant fourth in terms of supplies (at euro 7.3 billion in value terms),and clocked lower growth than Bangladesh and Pakistan,both of which have concessional duty access to the Union.

Despite the stellar show in home textile,analysts say the loss of competitiveness in apparel and clothing segment is grim news as these products entail much higher margins for exporters than home textile products.

Initial market trends during 2012 show that India has ceded more ground to Vietnam and Indonesia in the US market for textiles and apparel,while Bangladesh has been ramping up its market share in the EU though the Least Developed Country concession that allows it zero duty access to European markets.

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