The vision of our Hon’ble Prime Minister (PM) Shri Narendra Modi Ji is to make India the third largest economy in the coming few years and also upgrade it from a developing country to a developed country. The government is actively working on this mission. Apart from other factors, exports play a vital role in improving the economy, particularly in the case of developing nations, as we are now. The textile and apparel industry is one of the important sectors that not only generates employment but also earns valuable forex. It is the second-largest employment-generating industry next to agriculture. Moreover, the employment-investment ratio in the apparel industry undoubtedly is far better compared to other industries. An investment of Rs. one crore provides employment to seven persons, and an ordinary sewing machine used in an apparel manufacturing unit gives employment to five people. Maximum (around 80%) apparel-cum-export units in India are of micro, small and medium (MSME) categories.

We are the leading apparel manufacturing and exporting nation in the world. During 2023-2024 country’s apparel/readymade garment (RMG) export was US$ 14,533.6 Mn. (INR 1,20,316.60 Crores). India’s major apparel-exporting competitive nations are China, Italy, Germany, Turkey, Spain, France and the Netherlands. India is the 7th largest apparel exporting nation in the world, though its share is merely 3%. Current global RMG trade is US$ 558.5 Bn. The top six apparel suppliers in the world above us are China (with 30% share), Bangladesh (10%), Vietnam (7.5%), Italy (5.1%), Germany (4.5%), and Turkey (3.5%).

EU and USA are top apparel-importing countries from India. Around 38% and 36%, respectively, of India’s total apparel exports are exported to the EU and USA, and they maintain top positions in India’s RMG export destination, followed by the UAE, UK, Germany, France, Spain, etc. It would not be out of place to mention that India’s share in global apparel trade is topsy-turvy because of several factors, though ample potential exists. Because of the steadily increasing tensions between the USA and China, the war, and the sea crises, the world is looking for the China+1 for trade and export, and apparel is not the exception. Besides, China’s suspicious nature in trade, manufacturing process, and product quality (use and throw) also compels the world to go for the alternative trade partner. Coined way back in 2013, it was a global business strategy of China+1 or just plus One refers to a strategy in which countries avoid investment and import the products from China and diversify their businesses to alternative destinations or countries. They had begun mulling and diversification strategies away from China, where transparency is more in all aspects of production and trade. Significantly other factors that must also be considered are China+1, a push by governments and companies alike to derisk global supply chains from being overly reliant on one geography. As far as the apparel sector is concerned, Vietnam, Italy, Turkey, Germany and Spain may have emerged as China+1 countries, but they are not big league players mainly because of their high wages. Undoubtedly, our main competitor in the China+1 strong race is Bangladesh. In view of the largest work force, industry-friendly investment employment ratio with appreciable women participation (>60%), comparatively low wages, availability of raw materials required in the entire chain of the apparel production within the country (India is the second largest producer of cotton), large domestic market and above all, transparency in the production process with complete compliances, our country has all the advantages of becoming a favorite C+1 in apparel global trade. However, following suggestions and strategy may be considered to exploit the opportunity we got in the form of C+1:

The growing China+1 (C+1) sentiment among global manufacturers looking to diversify their production facilities out of China offers an important opportunity to India to further improve the output and employment share of apparel-making units.

There is a need to rein in the tariffs involved in different processes of apparel production, interstate movement and import of the raw material, and apparel export. Compared to other emerging countries like Bangladesh, Vietnam, etc., tariffs in our country are quite high, which lead to increased production costs invariably. This state of affairs makes Indian apparel exporters very difficult to be in fierce global competition, and our competitive countries take the benefit of it.

Similarly, the procedure/SOP involved in government schemes and completing the Other activities, right from the establishment of the apparel units to marketing the product, are undoubtedly very tedious and complicated and need to be relooked to make it simple, convenient and industry-friendly.

Early conclusion of FTAs with the UK, EU, New Zealand, and the Gulf Cooperation Council (GCC), comprising six Middle Eastern countries—Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, Oman and Israel. Worthwhile to mention that Bangladesh being the least developed nation and our major competitor availed so many benefits/incentives because of FTAs, etc.

The United States of America has terminated India’s eligibility for the Generalized System of Preference (GSP), a duty-free import scheme, from 05/06/2019. India had been availing benefits and the biggest beneficiary of GSP since 1975, which allow duty-free export of the products, including apparel, to the US. The US is the second largest market for India’s exports of apparel and textile products under GSP. Indian apparel exporters availed of a tariff exemption of around 300 US$ Mn. before GSP termination, which was a great help to them. Since the USA has a one-to-one trade conflict with China, an attempt from the government of India to pursue the USA to revoke the termination of the GSP would certainly boost apparel exports and make it easy for India to become a reliable C+1.

Cotton, being the natural fabric, is one of the major raw materials used in apparel production. It meets more than 50% of the raw material requirements of the industry. Fluctuation in cotton prices is a common phenomenon that affects apparel manufacturers and exporters. It is a serious problem that requires being addressed. The need of the hour is to ensure supply of raw materials, particularly cotton, to the entrepreneurs at internationally competitive prices.

The ongoing Amended Technology Upgradation Fund Scheme (ATUFS), started in 1999, aims to facilitate investment, employment, productivity, quality and import and export substitution in the textile industry. In fact, it indirectly promotes investments by entrepreneurs in machines. The schemes provide subsidies on capital investment to the textile entrepreneurs for upgradation of technology. The performance reveals poor utilization of funds allocated for the scheme due to obvious reasons. Therefore, a liberal alternative scheme in place of ATUFS may be considered.

Production Linked Incentive Scheme (PLI) launched by the government of India in 2021 to promote the production and export of manmade fibre apparel, fabrics, and technical textiles proven to be a boon for the entrepreneurs. PLI may be considered to extend to the readymade garment sector.

As stated, Bangladesh is our strong apparel exporting country. Bangladesh was nowhere in the global apparel export platform a few years back. Surprisingly, it has now become the second apparel exporting country, leaving India far behind. Things have become further complicated for Indian apparel exporters after allowing Bangladeshi apparel exports from Air Cargo of Indra Gandhi International Airport (IGIA), Delhi. This enables Bangladesh to deliver their apparel consignment quickly to the buyers, posing a threat to the Indian export. This issue needs to be reconsidered by the government.