Post-quota, this is most probably the first time that Indian apparel export is having reasonably good orders as more and more buyers are looking towards India. Government is not only aggressively working on FTAs but also taking positive steps at the policy level – both medium and at the top. A lot of apparel exporters have expanded recently or are in the process to increase their capacities. All these and allied developments show that the Indian apparel industry is gearing up for a better future. Experts too believe that with a focus on MMF garments, sustainability and FTAs, the Indian apparel sector will become the world’s best garment factory in the next three years. Sharing their growth plan, companies across India are happy and the only apprehension the industry has is regarding raw material security which is further creating issues like liquidity crunch and unprecedented pressure on profit.
The combination of favourable global scenario and Government support has made the Indian apparel exporters’ sentiments high. And these sentiments have created hopes that in the next season, there will be more orders. Buyers are also giving such indications. Indeed, such a scenario was never seen there in the last decade when most of the things were in favour of the industry. And this reflects in export figures also as apparel exports of the country have already seen double-digit growth.
Also Read: Indian apparel manufacturers’ revenue can grow 16-18% this fiscal: Crisil
Level playing field by trade deals
Sentiments are high for Indian exporters as there are multiple reasons in their favour and that too at various levels. Some of the aspects responsible for such high sentiments are the trade agreements which were pending from decades. Most recently, two trade deals were done and more are in pipeline.
The trade agreements with UAE and Australia have given a level playing field to Indian exporters. Australia is the largest apparel importer in the southern hemisphere and Indian apparel used to face an average tariff of 4.8 per cent in Australia as against zero duty for apparel from China and Bangladesh. Now India is also having the same advantage. So far India has a 3.22 per cent share (US $ 203 million) in Australia’s total apparel import and as per industry estimates, zero duty access would more than triple Indian apparel exports to Australia in three years.
And India has the potential to export knitted jerseys, pullovers and T-shirts of MMF which is a big chunk of Australian apparel imports. Jerseys, pullovers, cardigans, waist-coats and similar articles, knitted/crocheted of MMF have been the biggest apparel imports last year, while the second position was comfortably taken by cotton T-shirts.
Another interesting aspect is that the deal with Australia will also help in a different way. India is not good at making winter goods and its strength is in producing Spring and Summer products, Thus, Indian factories do not utilise their full capacity while producing winter goods. Australia, which is in the southern hemisphere, will need Spring and Summer products when it’s a lean season for Indian apparel factories.
Similarly, the Comprehensive Economic Partnership Agreement (CEPA) with UAE is also going to be a milestone for Indian apparel export. India supplies US $ 1.5 billion of apparel to the UAE as against its total imports of US $3.5 billion and thus Indian apparel exports contribute a decent share of 43 per cent. The trade pact would result in a drop of 5 per cent import duty for Indian apparel and will further strengthen the dominant position of Indian apparels in the UAE.
Source : https://in.apparelresources.com/