Financial Daily from THE HINDU group of publications
Saturday, Jul 02, 2005
Financial Daily from THE HINDU group of publications Saturday, Jul 02, 2005 |
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Exports & Imports Industry & Economy - Textiles Small foreign buyers make it big for textile exporters Anil Sasi
New Delhi , July 1 FOLLOWING the dismantling of the textile quota regime, the smaller textile retailers from the developed countries are emerging as the main customers for domestic textile and garment exporters. Even as big textile retailing giants have increased supplies from the domestic market from January this year, it is the smaller US, European and Australian retailers that are making a big difference in the order books of domestic exporters, according to industry players. Some of these players are offering higher margins to Indian suppliers, against the margins offered by larger established players such as Wal-Mart and JC Penney, players said. Newer foreign retail entrants such as the US-based Macy's, G-Star, Sara Lee Corporation; David Jones, Country Road and Lowes of Australia and Italy's Carrera, most of whom have entered the country over the last six months, are responsible for the quantum jump in sourcing from Indian suppliers following the quota phase-out. Industry players estimate that sourcing by these smaller buying house and retailers, put together, could cross the orders placed by the bigger retailers, including Wal-Mart, Marks and Spencer and JC Penney. According to industry players, brands such as Diesel, Burberry's and Nicole Farhi are planning to source from Indian suppliers. Recently, five major textile retailing giants from Australia — David Jones, Target, Country Road, Little Label and Lowes — have announced plans to open buying offices in India this year. Most of these Australian retailing firms are expected to set up buying offices in Chennai, in light of the city's proximity to the textile hubs of Coimbatore and Tirupur, industry players said. "The big difference in the volumes has been the entry of these new buyers since the quotas were phased out. What is even more important is that they are paying a considerable premium over what is paid by the larger bulk retailers such as JC Penney and Wal-Mart," said a Delhi-based home furnishing exporter. According to industry players, most of the small foreign firms have traditionally depended on suppliers from China prior to the quota phase-out. Some of the new entrants are also going beyond the traditional sourcing agreements. Italian casual wear fashion company Carrera, for instance, is planning to pump in $130 million into the Indian textile industry by setting up a series of operational outfits. These include an engineering company to manufacture weaving machines, finishing machines, robotics for garment manufacturers, a finishing house, an online account, an industrial service company and retailing ventures.
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