India’s textile heritage is legendary, dating back to several centuries, and it is renowned world over for its diverse and exquisite range of offerings, ranging from fabric to fashion. Indian textile traditions are intertwined in every possible way with India’s rich cultural heritage.

Sadly, however, India’s apparel export curve has flattened and plateaued over the years, notwithstanding the abundance in raw materials, presence of entire value chain in each textile fibre and world’s second largest spinning capacity. It’s both baffling and worrying but true.

Things have not worked out for the industry as it should have. It has been a roller-coaster ride. However, not bogged down by not-too-encouraging trend over the years, the apparel industry has taken it upon itself to defy the trend and raise the bar by setting an ambitious target of $40 billion by 2030 AD.

The following strategies may enable industry to reach this ambitious, yet achievable target:

Alignment of exports with the market demand: Indian exports across all the sectors by and large have not been in sync with the global demand. Typically, 70 per cent of Indian exports targets only 30 per cent of the global trade. The apparel sector is no exception. Out of the top 15 apparel products which are high in global demand, Indian exports worth mention are only in respect of 5 as against 11 by Bangladesh, 14 by Vietnam and 9 by Turkey. This clearly indicates that India does not manufacture apparel products having high global demand and has largely been pushing exports of products it is good at and has core competence in. That will need to change sooner rather than later.

The strategy should be to identify every country and its top imported commodities where India has low share, ascertain compliance issues in that market, undertake the exercise of cost comparison with competing countries, carry out disability analysis of the relevant cluster/company and then identify and take required steps to overcome these challenges. These focused interventions at the micro level can largely minimise the supply-demand gap in top traded apparel products in major markets.

Brand building: As it stands, the existing capacity in garment manufacturing is insufficient to meet the projected target. According to reliable estimates, it would require at least 1,200 additional average size manufacturing units by 2030 AD to reach somewhere near the target of $40 billion whereas at the existing pace only 200-odd units are expected to be realistically added to the existing capacity. So, the only plausible option seemingly available to meet the target is to increase the unit value realisation (UVR) for our exports of apparels and garments, which in turn is possible only through proper branding of Indian apparel products. Brand image can be improved through strategic marketing and by obtaining certifications and accreditations for the manufacturing units and giving adequate emphasis on meeting stringent quality standards.

Certifications like GOTS (Global Organic Textile Standards), ECO PASSPORT and LEED (Leadership in Energy and Environment Design) for garment factories, certifications regarding ESG compliance, SA8000 regarding socially acceptable practices in the workplace. etc., must be obtained on priority basis to demonstrate Indian RMG (readymade garment) industry’s willingness to conform to standards. The word about Indian industry’s newfound love for certifications, sustainability, and circularity besides other compliances be spread everywhere and India story be marketed internationally to inspire confidence among quality conscious markets of the developed world. This can lead to enhanced trade and commerce and higher unit value realisation. Massive effort should also be made to turn some of the top Indian brands into global brands through enabling policy support.

Capacity creation: India’s impressive spinning capacity is not matched by weaving and processing segments, which continue to be lacking scale, expertise and technology. Even the garmenting segment is largely fragmented, unorganised and dominated by MSME units. These weaker links of the textile value chain need massive investment to realise their true potential. Major domestic players in the textile industry should be coaxed and cajoled to plough back their profit to create sufficient capacity in these segments. The government should also accept apparel industry’s suggestion for another version of production-linked incentive for all types of garments with lower investment limit as the investment threshold in the current version of PLI for manmade garments and fabrics is not suitable for apparel industry. Capacity creation through massive investment in weaving, fabric processing and garmenting will strengthen the value chain and also help industry achieve economy of scale, thereby making Indian products cost-competitive

Diversification: Remaining largely confined to a select few markets and products have proved to be the ultimate bane for the apparel exports sector. Top 10 countries contribute to 74 per cent of India’s RMG exports. Last year, the US, EU and UK accounted for 34.5 per cent, 28.2 per cent and 8.8 per cent of Indian apparel exports, respectively. This kind of extreme dependence on fewer markets makes Indian RMG exports extremely vulnerable to economic downturn/stagnation/turmoil in these economies.

Similarly, India’s top 20 products contribute to 63 per cent of total apparel exports. MMF based garments by virtue of its versatility, durability and affordability have found increasing acceptance and enhanced use in fashion, formal and sportswear whereas India’s forte has always been in the cotton-based summer wear. India’s near-absence from the MMF apparel scene has stunted the growth of Indian RMG exports. Thankfully, however, PLI for MMF fabrics and apparels and the Indian government’s deeper and accelerated FTA engagements with non-traditional markets will largely address the issue in the near future. Disappearance of European brands and possibilities of rupee trade have created a window of opportunity for India in Russia. Tariff elimination post India-Aus ECTA and India-Mauritius FTA has given a fillip to RMG exports in these markets. The re-orientation of global supply chain should be taken advantage of and opportunities in other promising markets must be explored.

E-commerce: Global e-commerce exports, currently at $800 billion, is slated to reach $2 trillion by 2030. India’s merchandise export target of $1 trillion in 2030 takes into account $200 billion from e-commerce alone. High internet penetration rate and low cost of mobile instrument in India and increasing demand from Indian diaspora can drive the projected growth.

E-commerce holds enormous promise for sectors like gem and jewellery and textiles and can play an instrumental role in accelerating the growth of apparel external trade, especially from MSMEs who form a vast majority of the sector. The e-commerce route must be exploited to take apparel exports to a higher growth trajectory. There is however need to ease regulatory compliances, raise value cap and create separate customs code for e-commerce shipments. A swift, bold and focussed approach is the need of the hour to boost e-commerce.

The writer is Secretary General, AEPC