October 2019 Edition Apparel October 2019 issue | Page 85

INDUSTRY INSIGHTS
BRAVING THE SETBACKS
Given the state of the domestic and global affairs,
the apparel industry has some major challenges
coming its way in the next year. As FTAs kick
in and competitions rise, the Indian apparel-
manufacturing segement will need to take on a
global agenda. The starting point for this is in the
exports market, which forms a major component
of the industry’s revenue. To ensure this, many
in the industry, such as the Tirupur Exporters’
Association (TEA), believe that the Government
needs to don a more proactive role. In particular,
the industry believes that the Government should
encourage a shift from raw cotton and yarn
to readymade apparel, which is where major
competition lies. However, this may be easier said
than done, given the rising needs and increasing
vulnerability of the agricultural sector.
Furthermore, there is also the matter of
domestic consumption that is estimated to be
five times as large as the export market. There
is a noticeable shift in apparel consumption as
domestic buyers are becoming more diversified in
their needs and wants. This is often cited as the
main reason why global brands continue to make
India a growth destination. This demand, when
backed by sales channels such as e-commerce,
AS FTAs KICK IN AND
COMPETITIONS RISE,
THE INDIAN APPAREL-
MANUFACTURING SEGMENT
WILL NEED TO TAKE ON A
GLOBAL AGENDA.
makes the domestic market a vital part of the
apparel industry’s future. Apparel already makes
up about 30 per cent of e-commerce sales, as
per data from the Ministry of Commerce and
Industry. However, this arena is not as easy
to navigate as it appears since many apparel
retailers are opting to source their products from
nations such as Bangladesh, simply due to the
cost advantage.
The Indian apparel industry faces its biggest
challenges not from a slowing economy or
recession but from trade competition from
neighbouring apparel-trading nations such as
Bangladesh and Vietnam, which have taken over
6.5 per cent and six per cent of the global market
respectively. And this is in addition to China,
which dominates with over 35 per cent of market
share. In contrast, India is only scraping by with
four per cent. Current estimates from ICRA
Limited show that the remainder of the year will
remain positive for the apparel exports market but
India is likely to face numerous threats before it
can fulfill its ambitions of soon making textiles an
industry worth US$300 billion. This is the moment
when manufacturers and the Government have
to decide what will define the future of trade—
winning over price or product innovation, for this
is the only way to revolutionise the future of the
country’s apparel industry.
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