Bangladesh races ahead of India in knitwear exports

Written by Neha Pal | Neha Pal | New Delhi | Updated: Oct 20 2011, 08:40am hrs
Bangladesh has emerged as the second largest knitwear exporter after China despite procuring yarn from India at an extra cost. Indias knitwear industry, despite its inherent strength of a strong raw material base, is losing out to its counterpart in the neighbouring country owing to high cost of labour, power and water. Inflexible labour laws and slippages in power and water supplies add to the woes of the Indian knitwear clusters.

According to the latest figures of the Confederation of Indian Textile Industry, both India and Bangladesh had a share of around 2.5% in the global knitwear market in 2005, but Bangladesh leaped forward to become the second largest exporter of knitwear whereas India failed to match this pace.

China continues to be the biggest knitwear exporter with exports worth $53.8 billion accounting for 33.5% of the world knitwear exports.

In case of t-shirts, Bangladesh enjoys the first place compared to Indias fifth position and in case of pullovers and cardigans, Bangladesh enjoys the second position compared to the tenth position of India. Even in case of baby garments, India has the fourth position as compared to the second place of Bangladesh.

Confederation of Indian Textile Industry secretary general DK Nair told FE: Productivity in Bangladeshs knitwear industry in terms of output per shift is estimated at 1.5 times that of Tirupurs knitwear cluster, the mainstay of Indian industry. Bangladesh knitwear industry sources yarn from India which results in an additional cost of around R8-12 per kg of yarn as against Tirupurs knitwear cluster that enjoys local availability of raw material.

One of the main reasons for India losing its position to Bangladesh is the higher costs of labour, water and power in Tirupur and West Bengal, which are its main knitwear clusters.

Bangladesh knitwear industry operates at a higher scale with small units housing around 100 stitching machines and large units having around 1,000 stitching machines on an average. Further, the labour laws in the country allow contract labour.

According to CITI, Bangladesh knitwear industry is eyeing the Indian market

as a key export destination as a result of the quota-free export limit of 10 million pieces for Bangladeshs readymade garments to India. Owing to the cost advantage that Bangladesh enjoys, the former will be able to supply products at a cheaper price to the Indian market, which is likely to further impact the

operations of the Indian knitwear industry and

eventually the employment opportunities in the sector, said Nair.

The Tiruppur knitwear cluster is also facing issues related to effluent treatment, resulting in closure of 700 processing units until they comply with zero liquid discharge norms (ZLD). Under these circumstances, some units have resorted to outsourcing wet processing operations to Gujarat, Punjab, West Bengal and other states. This has resulted in an increase in dyeing

costs from R70-90 per kg to R170-225 per kg.