Indian textile industry anticipate close to 10% growth in apparel exports to the US

Indian apparel exports to the US has witnessed rise by 7.5% at 745 million square metres equivalent (msme) for the period January-September 2014 over the corresponding period last year, as per the latest data by the US Department of Commerce’s Office of Textile and Apparel (OTEXA).

Banking on shipments for the festive season in December and a reviving global economy, especially in the western markets like the US and Europe, the industry anticipate close to 10% growth in apparel exports to the US given the kind of order that the industry is attracting from current 7.5%, according to the Apparel Export Promotion Council (AEPC).

AEPC stated that globally too, India has been registering a 17.6% growth in apparel exports at $8.3 billion for the period April-September of the fiscal 2014-15.

India is gradually gaining its share in apparel exports to the US with China and Bangladesh becoming costlier and unviable day-by-day.

China and Bangladesh posted 3.9% and -4.63% growth in apparel exports to the US, respectively resulting in shift in exports orders to India. As per OTEXA data, China shipped 8,108 msme apparel as against 7,800 msme for the said period last year, while Bangladesh shipped 1,260 msme as compared to last year’s 1322 msme.

Rising labour costs have led to China reducing its focus on labour intensive sectors like textile even to the point of off-loading export orders. According to industry sources, costs have risen by anywhere between 25% and 45%. On the other hand, unhealthy working conditions and recent mishaps across textile units in Bangladesh have raised concerns among local groups in the US thereby putting pressure on apparel importers to look at other exporting nations like India and Vietnam.

The two major competitors of India, namely China and Bangladesh have drawn flak from global apparel importers, especially those from the US for increased cost of production and compliance issues. This has helped India earn increased favour among apparel importers which the domestic industry here is trying to make the most of, said Rahul Mehta, president of Clothing Manufacturers’ Association of India (CMAI).

Mehta further added that with a 3-5% increase in apparel manufacturing capacity coupled with lot of unused capacities, Indian apparel industry will be able to make the most of increased orders in near future. The garment industry this year is anticipating touching 12 million pieces capacity, up from 9,000 million pieces in 2009.

In terms of value in US dollars, Vietnam, India, China and Bangladesh posted apparel exports growth to the US of 15.63% ($6.9 billion), 5.64% ($2.6 billion), 0.26% ($22.4 billion), and -2.12% ($3.78 billion), respectively.