Can India Textile City Really Compete With The Global Clothing Industry?

The main disadvantage of India's textile industry is that its efficiency is low, almost 1/3 of that of Chinese workers.

India

Kumar T, R, thinks that India can challenge Bangladesh, Vietnam and even China in terms of its leading position in the global apparel industry.

Kumar is the second generation of garment manufacturers. He has built a small business of his family vest in the southern part of India into a garment export company with 1700 employees and plans to double sales by 2020.

Rupp, his hometown, is known as "India".

Capital of industry, he has higher expectations here: the export volume has increased by two times, at the same time, 500 thousand new jobs have been added.

Tirup's CBC fashion factory production line

"Rupp will become the next China."

One night in August 2016, Kumar, in his CBC CBC Fashions Pvt. office, told reporters at the same time a hard cover action plan launched by him and other manufacturers.

"China's production costs have risen, and they are phasing out the textile industry.

Opportunity will come to other countries, so we must seize it. "

The problem is that the rest of Asia has already led too much.

India's clothing exports of $17 billion are only half the size of Bangladesh in 2015, and its global market share of 3.7% is also 5.1% behind that of Vietnam.

Bridging these gaps is crucial: the clothing industry is a labor intensive industry that has helped many developing countries to pform from the agricultural economy.

The India economy needs to create 80 million new jobs by 2025 in order to meet the needs of a rapidly growing young population.

A recent polls show that the biggest failure of India's prime minister Narendra Modi (Narendra Modi) so far is not to revitalize employment.

In 2017, elections will be held in seven states in India.

The Modi Administration recently announced a package of stimulus packages of nearly $1 billion for textile and garment manufacturers, including recruitment subsidies, tax rebates and relaxation of overtime provisions, aiming to create 10 million jobs in the next three years and increase exports by 30 billion US dollars.

ICRA Ltd., Moodie's local branch of Moody's Investors Service, said that the goal is challenging because of the slowdown in demand from importing countries. (Investors Ltd.)

"The window of opportunity is narrowing. If we want to regain competitiveness and market share in the textile industry, India must act quickly," said Arvind Subramanian, chief financial adviser of the Ministry of Finance and textile minister Rahimi Verma (Rashmi Verma) in a June column explaining the stimulus policy.

To add insult to injury, the reputation of India's textile industry suffered a blow in August: as WelspunIndia Ltd. sold fake Egyptian cotton bedsheets, Target Corp. Corp. terminated its cooperation with the company.

Automation threats

The main disadvantage of India's textile industry is that its efficiency is low, almost 1/3 of that of Chinese workers.

A study published in 2017 by the Japan Center for Economic Research (Asian Economic Policy Review), which will be published in 2017, shows that this is partly due to the fact that garment manufacturers in the country are often not registered, and are smaller than other countries' garment manufacturers, thus restricting the use of modern production technology and the ability to accept large orders.

Cutting workshop

This gap may widen as foreign garment and textile manufacturers deepen automation.

"India must seize the time to take advantage of the young population."

Russell Green (Russell Green), an international economic researcher at Baker Institute for Public Policy, Rice University (Rice University), said Beck.

"Automation will make India less and less available."

About 78% of India's employees are less than 50, compared with 15% in China, Subramanian said.

It also means that many enterprises are still outside the government's taxing and regulatory threshold, which is what economists call "informal" economy.

A report released by the world bank in 2016 showed that the number of regular clothing workers in Bangladesh was 15 times that of informal workers, while the number of informal clothing workers in India was seven times that of regular workers.

Babu, Venkatachalam Babu, is the boss of a small business. He calculates wages for workers according to their parts.

In his workshop connected to his residence, 12 of his staff, including two relatives, cut and sewed children.

And trousers, the material is the leftover cloth he bought from the exporter.

Vin Qatar, Babu

Although foreign markets are out of reach, Babu can still rely on the rapidly expanding domestic market, and smaller competitors do not have this advantage.

He used to work for others himself, and he founded his own company 20 years ago with four workers.

He said that when more than 20 employees, he would go to register.

"We want to be bigger."

At the same time, he said, his mother was sitting on the floor with her legs on the floor, sorting clothes, surrounded by a bag of cloth.

"Labor shortage is a problem."

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For countries with a population of 1 billion 200 million, this may sound strange, but all four manufacturers interviewed by Bloomberg in Rupp reflect the same problem as Babu.

The Rupp district has a population of 2 million 500 thousand, and the housing construction here fails to meet the needs of the expanding floating population.

Kumar's plan of action says that the lack of skilled labor is the biggest threat to the growth of the textile industry, and suggests building houses and dormitories for 300 thousand people.

The workers are folding cotton cloth.

India is also facing other constraints.

Because only the production of pure cotton clothing, India's ability to enter the winter clothing market is limited. At the same time, buyers also think that compared with China or Vietnam, India is less efficient and less reliable.

In neighboring Bangladesh, the clothing industry accounts for 80% of overseas exports, and the monthly minimum wage is about 30% lower than that of India's $105. Besides, Bangladesh's exporters do not need to pay tariffs to EU countries.

Despite large-scale cotton production in India, it is difficult for India companies to compete with Bangladesh's preferential tax treatment.

ICRA analyst Anil Gupta (Anil Gupta) said.

He said the industry "relies on government incentives to survive", and these awards help companies maintain profitability and continuous recruitment.

The India government said in August 31st that total exports of goods increased by 3.2% in the three months ended June, showing signs of a rebound after the five consecutive quarters of contraction.

Nevertheless, India still has no support for garment manufacturers like Bangladesh, "said M. Arul Saravanan, chief marketing officer of SCM Garments Pvt., Rupp's clothing company," said M.

The company has 15 thousand employees, and Decathlon SA, a French sports retailer giant, is one of its customers.

He said that signing trade agreements and stabilizing cotton prices would greatly stimulate investment.

T. R. Vjja Kumar

Tirup's exporters also unite to reduce costs, teach other companies about streamlined production management techniques, and train factory workers to increase production.

The government provides some funding for these projects.

Kumar said the move was inspired by Moody's, who in the 2013 campaign called on manufacturers to expand their proposals rather than just listing concerns.

Now they want to take the action plan to the capital of 2400 kilometers away, so that moody will mobilize all ministers to take action.

"In order to compete, we must cultivate new start-up companies in India. We must reduce operating costs."

Kumar said.