INDUSTRY
Lack of access to raw materials deeply impacts Indian garment exports: GTRI
- IBJ Bureau
- Jul 22, 2024
India’s garment exports in 2023-24 at $14.5 billion were lower than what was achieved in 2013-14. It is not competition in world markets, but lack of access to quality raw materials, particularly synthetic fabrics, that has led to negative growth, according to a report by a trade policy think-tank. This is despite the sector holding immense employment potential.
High import duties on fabrics, complex Customs and other regulations, force the industry to rely on domestic manufacturing which is concentrated, leading to increase in costs. This makes Indian garments overpriced and unappealing to global suppliers who prefer specific fabric sources, the report by Global Trade Research Initiative (GTRI) has said.
Exporters need to import fabric to meet buyer specifications but Quality Control Orders (QCOs) complicate these imports, pushing exporters to produced fabrics locally, which may not meet specifications and are expensive too. Exporters in Vietnam and Bangladesh face no such restrictions and have gained substantial global market share, the report adds.
QCOs on raw material for synthetic fabrics like polyester viscose fibre and viscose staple fibre require foreign suppliers to also get Bureau of Standards certification making imports expensive and slower. Due to the curbs, domestic prices of PSF and VSF are 20 per cent higher than those in the international market.
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