Can India beat Bangladesh in the textile/apparel business?

Bangladesh is gradually getting ready to cater garment work orders worth $7 billion to $8 billion every month. At present, they are not capable of supplying products worth $7 billion to $8 billion, but they are expanding capacity

Since the garment export is on the rise, a lot of investment is seen in spinning, weaving, dyeing and other primary textile sectors in 2022

The spinning sector witnessed a major jump in investment last year as entrepreneurs set up 26 new mills to meet rising demand. Entrepreneurs pumped Tk 5,970 crore in the new manufacturing plants.

Apparel manufacturers in India— import buttons from China and Hong Kong, where the more fashionable wooden or engraved ones are made. The industrial-grade thread they use comes from one factory that makes it in India—that of Madura Coats in Chennai.

India’s scattered and fragmented textile supply chain, which increases shipping costs, which in turn adds to manufacturing lead times. All these result in the industry struggling to compete with Bangladesh and Vietnam.

An Indian manufacturer takes 90-120 days to ship an order of 20,000-30,000 pieces, say industry experts. In Bangladesh and Vietnam, where the supply chain is more clustered, it takes 14-21 days.

No wonder Vietnam and Bangladesh trail only China in textile exports, while India is fifth, as per the World Trade Organization’s latest statistics review. Since 2016-17, India’s exports have fallen 20 per cent to $29 billion in 2020-21.

To bolster its growth, the government announced a Rs 10,683-crore production-linked incentive (PLI) scheme in September 2021, aimed at increasing the production of man-made fibres such as polyester, and technical textiles used in making products such as sportswear, fishing nets and surgical disposables.

The government’s second move, announced in October, looks more promising. The plan is to build seven mega integrated textile parks across India. Each will house modern industrial infrastructure and will bring various parts of the value chain in one location, reducing manufacturing time and logistics costs.

Another big challenge is labour issues plaguing manufacturers. The key to make the textile sector less labour intensive is automation. But this would mean job losses and that’s why labour unions have for long opposed major technological upgrades. China, on the other hand, has a hire-and-fire policy, with wages tied to a labourer’s output.

The rise of Bangladesh and Vietnam as export hubs is not just due to their lean production times and technological advancements, but also due to free trade agreements (FTAs) and preferential trade agreements (PTAs) they have with western and European countries.

So all in all we have some serious challenges ahead but with the right govt leadership and industry heads we can certainly gain the 1st spot in next few years.

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