Indias Global Competitiveness in Textiles and Apparel

The current global apparel market is worth $1.7 trillion which makes it around 2 per cent of the world’s
GDP. The European Union, USA, and China are the world’s largest apparel markets constituting about 54
percent of the global apparel market size which is expected to reach $2.6 trillion by 2025.The developing
economies, mainly China and India shall be the major growth drivers of the global apparel market. India
is expected to be the second most attractive apparel market adding more than $121 billion by 2025 in
total market size.

Global Textile Industry has witnessed a major shift in the last 3 decades in terms of its production bases.
The production of textile & apparel was more centered in USA and EU until early 1980s, but gradually
this shifted majorly to Asian countries, stemming from the low cost manufacturing advantages available
in these developing nations. Also, it was during this time that China experienced a massive boost in
Industrialization after the liberalization of Its Industrial Policy in 1980s.Other Asian economies like India,
Bangladesh, Indonesia, Vietnam and few other also experienced an upsurge in their textile and apparel
manufacturing during this period.

Federal Tax Authorities (FTAs) also played a significant role in shaping the global textile and apparel
industry. Several smaller nations like India, Bangladesh etc. have leveraged their preferential duty access
to EU & US, the Key apparel markets, by increasing their textile and apparel exports manifolds.

In recent times, plurilateral negotiations have been launched on establishing 3 mega FTA’s – these have
the potential to change the global trade and investment flow owing to their cumulative economy size
and population. India, China, ASEAN nations and four others have initiated negotiations to establish
RCEP (Regional Comprehensive Economic Partnership). The nations who are part of these agreements
are likely to gain cumulatively.

In addition, China’s growth in the global textile and apparel trade has shown a downward trend since
the economic crisis in 2009. This reduction in China’s share has and will continue to serve as an
opportunity for the competing nations to increase their share in the global trade. India, as a resource,
has the capability to take maximum advantage due to its huge textile base, manpower availability and
infrastructure. Also, finalization of FTA with EU can bring about a huge positive impact for Indian apparel exports.

India has a large textile manufacturing set up and is among the very few nations who have the
production facilities across each level of the manufacturing value chain, from fiber to finished goods
(garments, home textiles and technical textiles). All the above conditions have been in favor of India and
according to the latest report by the real estate consultant Cushman & Wakefield, India now ranks 2nd in
the list of the most sought-after global manufacturing destination.