Indian Retailer

The nearly $10-billion Indian textile and apparel industry, buoyed by a growth in August after nine months of decline and by increased
demand from Europe, says it's taking on its biggest competitor by entering the Chinese market.

"We are charting a new course by entering China, the textile behemoth," said Apparel Export Promotion Council (AEPC) chairman Rakesh Vaid.

"Earlier, we were tied to traditional markets like the US and Europe, where 70 percent of our textiles and apparel are exported. But now we have taken on China, our biggest competitor, on its own turf," Vaid told IANS.

"China is known for exporting cheap textiles across the globe," he said, adding: "We are far ahead of China in terms of creativity, fashion, designs and the variety of textiles."

India's main competitors are Asian countries such as Sri Lanka, Bangladesh, Vietnam and Cambodia, apart from China. "But India has made inroads into these markets as well," the AEPC chairman said. "We have been entering new markets over the last two years."

The move to enter new markets comes at a time when the country's textile sector is facing one of its worst crises with business orders from advanced economies like the US and Europe having fallen sharply due to the global slowdown. But Vaid said he is "optimistic about the business trends".

"After nine months of consecutive losses and slowdown (since December 2008), the industry logged growth in August," he said. "Exports to Europe have gathered pace, retail chains there are buffering up inventories for spring-summer. I am just back from Europe. I expect the market to pick up early next year."

According to the council, exports to the US rose 1.39 percent in August over that in July, the same month when exports to America slumped 6.09 percent compared to that in the corresponding month last fiscal. The August performance comes after garment exports fell 15.4 percent in the first quarter this fiscal, prompting the government to announce a subsidy of Rs.2,546 crore ($535 million) for the crisis-hit sector.

In the $373-billion global clothing industry, India's share has fallen over the years from 3.3 percent to 2.6 percent, amounting to $9.69 billion. To maintain the current share of 2.6 percent, India needs to export $18 billion worth of clothes annually, requiring 2.7 million additional manpower and investments of $30 billion. The sector employs over 33 million people, and contributes about four percent to the country's gross domestic product (GDP) and 14 percent to its industrial production.

However, the meltdown has taken its toll: companies have reported mounting losses and retrenched staff. "Lately, we have been trimming overheads and manpower, and learning to live without government subsidy," Vaid said.