The garment industry in Bangladesh, a vital part of the nation's economy, has shown resilience amidst challenges, serving major global brands. Despite recent disruptions, Bangladesh remains a key player in garment exports, with a notable USD 44 billion in 2023. India eyes opportunities in the industry, aiming to enhance scale and competitiveness. As Bangladesh faces uncertainties, India plans to revamp its apparel sector, focusing on specialized expertise and synthetic fabrics to align with market trends and potentially shift the industry landscape in its favor.
The garment industry in Bangladesh, often hailed as the backbone of the nation's economy, has demonstrated remarkable resilience in the face of adversity. While recent times have seen their fair share of challenges, including labor unrest and political turmoil, Bangladesh's garment sector has stood firm, catering to global giants like Walmart, Zara, and H&M.
Despite the current uncertainties, Bangladesh continues to shine on the global garments industry map. Over the years, it has solidified its position as a key player in the market. In 2023 alone, the country's garment exports reached a commendable USD 44 billion, placing it behind only China and the EU-UK in terms of export volumes.
Recent disruptions, spurred by political unrest and factory closures, have raised concerns. However, reports indicate that many factories have resumed operations, offering a glimmer of hope for a sector that drives a significant 84% of Bangladesh's goods exports, providing livelihoods to millions, especially women.
The repercussions of these disruptions are being felt across the industry, prompting major brands to reconsider their supply chains. This shift could potentially open doors for Indian garment manufacturers, as hinted by the surge in textile stocks on the Indian stock market.
With buyers exploring alternative sourcing destinations due to the uncertainties in Bangladesh, India stands to benefit from this shift. The country's textile hub in Tiruppur, known for its competitive pricing and quality, is already attracting attention from global buyers seeking reliable alternatives.
While Bangladesh's advantages, such as duty-free market access and cost competitiveness, remain unparalleled, India's stability and efficiency could present new opportunities in the changing landscape of the global garment industry. As buyers seek to mitigate risks and diversify their supply chains, India's reliability and expertise in textile manufacturing could prove crucial.
The symbiotic relationship between India and Bangladesh in the textile industry underscores the importance of a stable Bangladesh for the seamless functioning of the supply chain. India's strength in spinning and weaving complements Bangladesh's garment manufacturing prowess, creating a mutually beneficial ecosystem.
As Bangladesh navigates through its current challenges, the global garment industry watches closely, acknowledging the resilience and strengths that have made Bangladesh a powerhouse in the world of fashion and textiles. While shifts in supply chains may occur in the short term, the enduring advantages of Bangladesh's garment sector are poised to maintain its significance in the global market.
Embracing the concept of "China plus one" presents a monumental opportunity for India to reshape its apparel industry landscape. Damodharan of the Indian Texpreneurs Federation emphasizes the need for India to revamp its apparel ecosystem through enhanced scale, competitiveness, and specialization. This strategic approach aims to capitalize on the broader potential of the market rather than merely reacting to short-term crises in neighboring markets.
India's current apparel export figures, standing at USD 1.3 billion per month, pale in comparison to Bangladesh's USD 3.8 billion and China's substantial USD 10 billion. Even a modest 10% shift in market share could catalyze a significant ecosystem expansion within India and beyond.
To excel in this evolving scenario, India must prioritize investments in scaling up operations, fostering a highly competitive manufacturing environment, and cultivating specialized expertise. Although immediate gains from the Bangladesh situation might be limited due to capacity constraints, the industry finds hope in initiatives like the PM Mega Integrated Textiles Region and Apparel Parks (PM MITRA) scheme. With a budget of INR 4,445 crore, this project aims to establish textile hubs in seven locations across India, promising a brighter future for the sector.
Both India and Bangladesh currently excel in cotton apparel production but lag behind in man-made fiber-based clothing like polyester and viscose, a segment where synthetic fabrics have gained global preference due to their durability and color retention properties. Prabhu from the Indian Texpreneurs Federation advocates for India's substantial foray into this domain to align with evolving fashion trends.
Notably, China dominates the man-made apparel industry, urging India to swiftly enhance its capabilities in this segment to stay abreast of shifting market demands. Furthermore, India's limited presence in synthetics manufacturing not only impacts its market share but also influences worker wages. As per a GTRI report, the predominance of informal cotton wear exports in India keeps wages at minimal levels, highlighting the disparity where a worker crafting a suit earns more than one making a shirt.
As India charts its course in the "China plus one" strategy, the industry's concerted efforts towards scalability, competitiveness, and diversification are poised to elevate the nation as a formidable contender in the global apparel manufacturing arena.
(Graphics by Sadhana Saxena)
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