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More gains likely for garment trade in post-quota regime

Our Bureau

Bangalore , Sept. 27

APPAREL exporters need not fear the quota-less trade regime of 2005 if they can consolidate into large players and capacity-boosting investments in the next 15 months, the Union Textiles Commissioner, Mr Subodh Kumar, said.

Currently, he said, there are too many small and fragmented capacities. ``While they move up the design and value chain, Indian manufacturers and exporters should never ignore the mass market'' on which Chinese exports are thriving. They must also access new markets that will open up, Mr Kumar told a two-day workshop on benchmarking for the apparel industry. The meet was organised by the Union Textiles Committee and the International Trade Centre of WTO/UNCTAD.

Post-quota, India along with China, which entered the WTO only in December 2001, will be one of the major beneficiaries in the apparel and textiles. Thanks to its established supply chain, ``the country should expect a growing market if it invests (in large capacities), integrates and focuses on the mass market,'' he said.

Though China's exports to the US during 2003 alone have grown a formidable 40 per cent, India can draw comfort from certain other factors: that China is ``in the game of increased turnover rather than on improving profit margins''. If that country corrects its 27.5 per cent undervaluation in the short term, then it would mean less competition.

Mr R.C.M. Reddy, Member-Secretary, Textiles Committee, also said the scene was definitely changing for the better. ``We haven't lost the battle and there are good chances of winning because of the country's large entrepreneurial skills.'' In the past two years, manufacturers have also been gearing for the new regime and investing heavily in machinery and upgradation worth at least Rs 1,000 crore, he said.

According to Mr Matthias Knappe, Senior Market Development Officer, the International Trade Centre, domestic trade should become more competitive by keeping track of their competitors and updating themselves on the trends. Regional Sourcing and alliances with suppliers would help. They should also be armed against new restrictions that the buyer nations would come up with such as eco-labelling, labour standards, codes of conduct and social compliance audits in the coming years. Countries who fully use their quotas will increase post-2005 exports.

Mr Reddy said the Textiles Committee was putting together a list of the various eco labels. As there is no Indian accreditation lab, testing is now being done in Singapore. The committee have suggested accreditation for the Mumbai lab.

The workshop also includes training in benchmarking for garment SMEs using the FiT software tool developed by ITC.

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