The Hindu Business Line : `Garment sector must build up supply chain'

INDIA is cost competitive in the global textile and clothing market, but needs to focus on higher productivity, economies of scale, modern technology and an efficient supply chain to grow its share of the market.

Also, designers need to tap the local market more, and focus on developing unique aspects such as embroidery and other workmanship. These were the observations of two experts on the international scene, at the concluding `Business of Fashion' seminars at the Lakme India Fashion Week with Liberty.

Beginning 2005, India will face severe competition - not just from China, but also from Vietnam, Bangladesh, Sri Lanka and perhaps Indonesia, said Mr Shridhar Subrahmanyam, Former Managing Director of Coats in China. China will continue to grow its garment exports - from $30 billion in 2000 to about $45 billion by 2005 - and India will also grow, although at a slower rate, he added. Smaller exporting countries are likely to face a severe downturn, and will perhaps disappear.

India will benefit from the disappearance of the small country, independent suppliers, but also needs to get away from the "small scale industry mentality" and erase its reputation for inconsistent quality and delivery schedules, Mr Subrahmanyam said. To do that, we must modernise infrastructure and increase supply chain efficiencies, and do away with all restrictions, he added.

Currently, while the US is the No. 1 destination for Indian exports, China is the No. 1 country of origin for imports of garment and fashion accessories into India, said Mr Ramesh Natarajan, Head - Marketing, DHL India. "This is because fashion designers prefer to work with synthetics, whereas India's strength is in cottons, so they are increasingly sourcing their material and fashion accessories from China and exporting their finished designs," he said. "This trend will accelerate and make one see China with new eyes - as a potential partner, rather than a threat."

But China will have its share of troubles, too: China's trade surplus with the US is high, so it is "highly unlikely that China will have free access without tariffs or other restrictions in the US textile and clothing market," Mr Subrahmanyam said. Already, a coalition of textile and apparel industry groups have asked the US government for new protections against what it called `unfair competition', and for a cap on certain imports from China.

India will need to be prepared for the post quota regime, as buyers will look to reducing the number of suppliers and sources, and look for a competitive advantage through "lower cost, consistent quality, frequent seasonal changes, short lead times and reliable delivery," Mr Subrahmanyam said. While India has lost its competitive edge in textile and fabric, it still has an edge in apparel and garments, he added.

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