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KIT: Textile and apparel trade

Strategic tools for the practising manager

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The global textile and apparel, or T&A, trade is expected to grow to USD 1 trillion by 2020. However, with growth slowing down in developed markets, the dynamics of the global are expected to change dramatically. Emerging economies, namely Brazil, Russia, India and China, along with a few other Southeast Asian countries, are seen as the major growth drivers.

In the recent past global apparel markets have seen a paradigm shift, moving towards increased product differentiation, and catering to a diverse, aware, and demanding customer base. Retailers have thus gravitated towards demographic shifts, societal and economic influences and environmental concerns.

India’s witnessed a quantum leap in the post quota era. The apparel trade from India crossed USD 11 billion in 2010 and has the potential of growing to about USD 50 billion by 2020. The industry has been witnessing closures of units for the last couple of years. Entry barriers have been rising as India has seen too much investment in new apparel manufacturing plants. It is thus important to analyse if India is still an attractive source for apparel exports.

Indian textile and apparel exports have been steadily growing over the years, from a cumulative figure of USD 11.5 billion in 2000 to more than USD 24 billion in 2010.

India’s growth has been steady and continuous in past years and there have been many key drivers for this growth:

* Ingrained factors make it an independent and self-reliant industry.

* Abundant raw material availability that helps industry control costs and reduces lead time across operations.

* Availability of low cost skilled manpower has provided competitive advantage to the industry. The recent wage increases have been dampers, but not to a significant extent.

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