Ready-to-wear garment exports may double in four years

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Readymade garments exports from India are expected to touch $14.5 billion (Rs 70,000 crore) by 2009-2010 with a cumulative annual growth of 18% to 20%. This optimism is based on abolition of quotas on all countries except China and the continuation of quotas on China until 2008.

In 2005, the country exported $6 billion worth garmets, contributing to 7.6% of the total merchandise exports. However, the Apparel Export Promotion Council (AEPC) chairman AK Agarwal, considers that to increase exports even to Rs 60,000 crore there should be an investment of Rs 30,000 crore to Rs 35,000 crore, including substantial foreign direct investment.

Agarwal believes that fresh investments and entry into new markets like South East Asia, Latin America and East European countries, besides the traditional markets in the US, Europe and the UAE, would propel the readymade garments exports to expected levels.

The US, India’s single largest export destination for apparels, accounts for 30.5% of total apparel exports.

India largely exports cotton apparels, which represent more than three fourths of total apparel exports of the country. It is followed by readymade garments of manmade fibres, which account for 11.6% of the total apparel exports. Other types of apparel made from wool, silk, and other textile material account for the remaining exports.

There is also a need for diversification of India’s apparel product base to boost exports. Now, almost 75% of India’s exports is in blouses, shirts, knit shirts, dresses and skirts.

By 2010, the domestic garment sales, excluding sarees, lungis and dhotis, are expected to touch Rs 1,00,000 crore.

According to the market studies done by Dun & Bradstreet Information Services, readymade garment industry is becoming increasingly globalised and there is fierce competition to cut cost, especially after the elimination of quotas in January 2005. This has created an increasing trend towards outsourcing of apparel production to low-cost countries like China, India, Pakistan and Sri Lanka. China has been emerging as the real winner in the garment export market. Indian industry is still handicapped by capacity constriants.