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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.

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