Indian garment exporters maintains per unit realization to the US market

Indian garment exporters not only maintained its per unit realization to the US market but also expanding its market share compared to other large garment exporting countries including China, Bangladesh and Vietnam who have been recording decline in their per unit realization to the US since the past three years.

According to the data from the Office of Textiles and Apparel (OTEXA), USA, the average realization per square metre equivalent of apparels exported by India to the US has been in the range of $3.4-3.6 since 2014.

In comparison, the average for China fell by 13 percent to $2.3 due to rising labour cost in China, Chinese apparel manufacturers have been slashing prices to stay competitive in the global market. Bangladesh dropped by 11 percent to $2.7 while Vietnam reported a drop of 9 percent in average realization at $3.

India’s share rose by 80 basis points to 4.5 percent compared with China, which lost market share by 380 basis points to 38.2 percent between 2014 and 2017 . Industry observers point out that more Indian apparel manufacturers are becoming compliant to the US norms in terms of quality of products, labour conditions, and other legal aspects.

Industry veterans highlighted rising use of manmade fabric in garments exported to the US compared with cotton. Manmade garments such as winter-wear and other specialized garments fetch higher value than cotton-based garments.

Although, this has increased cost of production in India, the US buyers are willing to compensate for this by paying higher prices supporting Indian garment exporters to not only improve realizations but also increase its market share.