Tiruppur, India knitwear town aims to take on China in apparel export

YarnsandFibers News Bureau, 2016-09-03 12:00:00 - Tamil Nadu

Related Keywords: aims to double its sales, an apparel exporter, boost exports, cost of production gone up in China, India are to grasp it, India to take on Bangladesh, Indian clothes maker, leadership in global apparel industry, phasing out textile, second-generation manufacturer, subsidies for hiring, T R Vijaya Kumar, tax refunds, Vietnam and even China

Tamil Nadu
Tiruppur, India knitwear town aims to take on China in apparel export

Indian clothes maker T.R. Vijaya Kumar a second-generation manufacturer, who’s transformed his small family undershirt business in southern India into an apparel exporter of 1,700 employees and aims to double its sales by 2020 thinks it’s time for India to take on Bangladesh, Vietnam and even China for leadership in the global apparel industry.

Tiruppur, hometown of T.R. Vijaya Kumar which is often referred to as the knitwear capital of India, aims tripling exports and adding 500,000 jobs in the process. The next China will be Tiruppur.

In China, the cost of production has gone up and they are phasing out textile. Opportunities will go to other countries, so India are to grasp it.

But the trouble is that other Asian nations are way ahead. India’s $17 billion exports of apparel were about half as much as Bangladesh’s last year and its 3.7-percent global market share lagged behind Vietnam’s 5.1 percent. Closing the gap is crucial as apparel is a labor-intensive industry, which has historically helped developing economies transition out of agriculture. The Indian economy needs to generate 80 million new jobs by 2025 to keep up with its fast-growing young population.

The government recently announced a nearly $1-billion package for textile and garment makers, including subsidies for hiring, tax refunds and relaxation of overtime rules with a goal to create 10 million jobs and boost exports by $30 billion in the next three years.

The target is challenging, as the demand slows in importing countries. The window of opportunity is narrowing and India needs to act fast if it is to regain competitiveness and market share in apparels, said Arvind Subramanian, the Finance Ministry’s chief economic adviser and, Rashmi Verma, the Textiles secretary.

Adding to the challenge, the textile industry suffered a reputation blow last month, when Target Corp. terminated $90 million of business with Welspun India Ltd. for labeling cheaper bedsheets as premium Egyptian cotton.

A key weakness of the sector is worker productivity, which is almost three times lower than in China. That’s in part because Indian apparel manufacturers tend to be unregistered and smaller than in competing countries, limiting the use of modern production technologies and the capacity to take on large orders, according to a study to be published next year by the Asian Economic Policy Review, a biannual journal from the Japan Center for Economic Research.

According to Russell Green, an international economics fellow at Rice University’s Baker Institute for Public Policy in Texas, gap could widen as foreign garment and textile producers continue to embrace automation. Automation is making the ladder shorter and shorter over time. India needs to start climbing the ladder fast to take advantage of its young population.

About 78 percent of Indian companies employ less than 50 workers, compared with 15 percent in China, according to Subramanian. That also means a lot of them remain below the threshold of government taxes and regulation, known by economists as the “informal” economy.

A World Bank report released this year showed that Bangladesh had 15 times more garment workers formally employed than in the informal sector, while India has about seven times more informal garment workers than formal.

In neighboring Bangladesh, where garments account for 80 percent of overseas shipments, the monthly minimum wage is about 30 percent lower than India’s $105, and exporters don’t pay duties to the European Union.

With the duty preference for Bangladesh, it becomes very difficult for Indian companies to compete, despite India’s large cotton production, said Anil Gupta, an analyst with ICRA. The industry is surviving on government incentives, that help businesses stay profitable and continue hiring.

Overall goods exports grew 3.2 percent in the three months through June, showing signs of a rebound after contracting for five quarters, the government said.

Still, India’s not as committed to its garment makers as Bangladesh is, said M. Arul Saravanan, chief marketing officer at SCM Garments Pvt. in Tiruppur, which has 15,000 employees and counts French giant sports retailer Decathlon SA among its clients. Signing trade agreements and stabilizing cotton prices would go a long way to spur investment.

Tiruppur exporters have also joined forces to lower costs by educating companies on “lean” production management techniques and training factory staff to raise output. The government is partly funding the programs.

To compete, they have to bring new startups in India, reduce costs of operation, Kumar said. That’s why they have urged Prime Minister to have a meeting in Delhi as they have to make more clusters in India. like Tiruppur clusters.

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Related Keywords: aims to double its sales, an apparel exporter, boost exports, cost of production gone up in China, India are to grasp it, India to take on Bangladesh, Indian clothes maker, leadership in global apparel industry, phasing out textile, second-generation manufacturer, subsidies for hiring, T R Vijaya Kumar, tax refunds, Vietnam and even China

Tamil Nadu
Tiruppur, India knitwear town aims to take on China in apparel export

Indian clothes maker T.R. Vijaya Kumar a second-generation manufacturer, who’s transformed his small family undershirt business in southern India into an apparel exporter of 1,700 employees and aims to double its sales by 2020 thinks it’s time for India to take on Bangladesh, Vietnam and even China for leadership in the global apparel industry.

Tiruppur, hometown of T.R. Vijaya Kumar which is often referred to as the knitwear capital of India, aims tripling exports and adding 500,000 jobs in the process. The next China will be Tiruppur.

In China, the cost of production has gone up and they are phasing out textile. Opportunities will go to other countries, so India are to grasp it.

But the trouble is that other Asian nations are way ahead. India’s $17 billion exports of apparel were about half as much as Bangladesh’s last year and its 3.7-percent global market share lagged behind Vietnam’s 5.1 percent. Closing the gap is crucial as apparel is a labor-intensive industry, which has historically helped developing economies transition out of agriculture. The Indian economy needs to generate 80 million new jobs by 2025 to keep up with its fast-growing young population.

The government recently announced a nearly $1-billion package for textile and garment makers, including subsidies for hiring, tax refunds and relaxation of overtime rules with a goal to create 10 million jobs and boost exports by $30 billion in the next three years.

The target is challenging, as the demand slows in importing countries. The window of opportunity is narrowing and India needs to act fast if it is to regain competitiveness and market share in apparels, said Arvind Subramanian, the Finance Ministry’s chief economic adviser and, Rashmi Verma, the Textiles secretary.

Adding to the challenge, the textile industry suffered a reputation blow last month, when Target Corp. terminated $90 million of business with Welspun India Ltd. for labeling cheaper bedsheets as premium Egyptian cotton.

A key weakness of the sector is worker productivity, which is almost three times lower than in China. That’s in part because Indian apparel manufacturers tend to be unregistered and smaller than in competing countries, limiting the use of modern production technologies and the capacity to take on large orders, according to a study to be published next year by the Asian Economic Policy Review, a biannual journal from the Japan Center for Economic Research.

According to Russell Green, an international economics fellow at Rice University’s Baker Institute for Public Policy in Texas, gap could widen as foreign garment and textile producers continue to embrace automation. Automation is making the ladder shorter and shorter over time. India needs to start climbing the ladder fast to take advantage of its young population.

About 78 percent of Indian companies employ less than 50 workers, compared with 15 percent in China, according to Subramanian. That also means a lot of them remain below the threshold of government taxes and regulation, known by economists as the “informal” economy.

A World Bank report released this year showed that Bangladesh had 15 times more garment workers formally employed than in the informal sector, while India has about seven times more informal garment workers than formal.

In neighboring Bangladesh, where garments account for 80 percent of overseas shipments, the monthly minimum wage is about 30 percent lower than India’s $105, and exporters don’t pay duties to the European Union.

With the duty preference for Bangladesh, it becomes very difficult for Indian companies to compete, despite India’s large cotton production, said Anil Gupta, an analyst with ICRA. The industry is surviving on government incentives, that help businesses stay profitable and continue hiring.

Overall goods exports grew 3.2 percent in the three months through June, showing signs of a rebound after contracting for five quarters, the government said.

Still, India’s not as committed to its garment makers as Bangladesh is, said M. Arul Saravanan, chief marketing officer at SCM Garments Pvt. in Tiruppur, which has 15,000 employees and counts French giant sports retailer Decathlon SA among its clients. Signing trade agreements and stabilizing cotton prices would go a long way to spur investment.

Tiruppur exporters have also joined forces to lower costs by educating companies on “lean” production management techniques and training factory staff to raise output. The government is partly funding the programs.

To compete, they have to bring new startups in India, reduce costs of operation, Kumar said. That’s why they have urged Prime Minister to have a meeting in Delhi as they have to make more clusters in India. like Tiruppur clusters.

0

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Related Keywords
aims to double its sales an apparel exporter boost exports cost of production gone up in China India are to grasp it India to take on Bangladesh Indian clothes maker leadership in global apparel industry phasing out textile second-generation manufacturer subsidies for hiring T R Vijaya Kumar tax refunds Vietnam and even China

 
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