The Hindu Business Line : Indian textile exporters eyeing brands in US, EU

INDIAN textile exporters are planning to move up the value chain and are trying to grab a piece of the high-margin branded segment in the home textile and apparel business in the US and the European Union (EU).

A start has been made with domestic terry towel major Welspun Industries Ltd entering into a licence agreement with global apparel major Nautica Enterprises for manufacturing, marketing and distributing the `Nautica' brand of bath towels in the US and Canadian markets.

The trend is expected to catch up even faster with many of the blockbuster apparel and home textile brands belonging to a number of bankrupt US textile retailers such as Pillowtex, West Point Stevens and Dan River up for sale, industry players said. Indian exporters are, however, expected to face stiff competition from Chinese players, who are eyeing these brands in a big way. In fact, the Hong Kong-based trading major, Li & Fung, has already picked up two of the most well-known home textiles brands in the US — Cannon and Royal Velvet from Pillowtex. "There is definitely a big opportunity in the branded segment in these markets," says Mr Rajinder Gupta, Managing Director of Ludhiana-based Abhishek Industries, among the biggest terry towel exporters in the country.

While Pillowtex has already gone bankrupt, West Point Stevens and Dan River are on the verge of closure. "This means that 70,000 to 80,000 tonnes of the US towel market is up for grabs and presents a big opportunity for Indian exporters to expand their business opportunity," an industry player said. Moreover, the net realisation per item for an exporter is several times higher in case of branded products. "It makes sense for Indian exporters to try and get a piece of the branded segment or to float their own brands in the US, EU markets," he said.

Following the phase-out of the quota regime in global textile trade from January this year, Indian exporters have emerged as major suppliers of textile items to buyers in the US and EU. They have, however, not been able to break into the high-margin branded segment and the foreign buyers and retailers have largely undertaken the branding of Indian exports so far.

The Government has, on its part, been trying to promote the branding of exports and the Ministry of Textiles is expected to come out with a policy for increasing India's market share through brand building. The Chinese administration is also encouraging textile enterprises to concentrate more on the high-end segment and the Chinese textiles industry is also increasingly looking at branding, fashion and design as the prime focus areas, the industry players said.

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