As Bangladesh Roils, India Sees Record Apparel Exports

While ongoing wars and geo-political conflicts had led to a disruption in traditional trade routes and global supply chains, the unrest in Bangladesh, one of the largest RMG bases globally, added to the global garment industry woes. 

However, amid this uncertainty, India’s garment industry managed to put up a strong show, to turn adversity into opportunity, aided by a revival in demand from its traditional big markets like the US, the UK and the Netherlands. 

India is also making gradual inroads in some of the free trade agreement (FTA) markets like South Korea, Japan, Australia and Mauritius, as global buyers scout for alternatives to China. Industry experts attribute the impressive export growth to a combined focus on quality compliance and sustainability, while leveraging India’s inherent strengths in raw material and manufacturing.  

All Dressed Up

The figures released by Apparel Export Promotion Council (APEC) indicate this unfolding story. RMG exports increased 35.1 per cent in October 2024 over October 2023, and shot up by 24.1 per cent against October 2022. The cumulative figures for RMG exports in April 2024-March 2025 stood at US$ 8732.6 million, showing a growth of 11.6 per cent over April-October 2023-24. However, this was a fall of 4.7 per cent over April-October 2022-23 — a period when the industry witnessed a historic revival after the Covid backlash. 

“We are now reaping the benefits of the RMG industry’s drive to strongly focus on quality and sustainability, by leveraging India’s strengths in raw materials and manufacturing of products with both traditional and modern designs. Our constant endeavour to be sustainable and affordable is attracting international buyers, reflected in recent months’ exports growth,” Sudhir Sekhri, Chairman, AEPC said last week. 

During the first half of 2024-25 (April-September 2024), overall RMG exports have shown an 8.5 per cent rise to US$ 7498.1 million over US$ 6909.5 million, according to AEPC data. If we look at top export destinations, RMG exports to the US has grown by 11.5 per cent to US$ 2564.8 million against US$ 2300 million, while exports to the UK were at US$ 675.5 million, a 7 per cent growth over US$ 631.2 million earlier, followed by Germany, to which exports rose by 6.7 per cent to touch US$ 388.8 million, against US$ 364.3 million earlier. 

However, what has pleasantly surprised fashion pundits is the 27.7 per cent jump in exports to the Netherlands, at US$ 357 million over US$ 279.9 million earlier, and the 18.1 per cent spike in exports to Spain at US$ 330 million, compared to US$ 279.4 million a year ago. 

Among FTA countries, exports to Australia were at $195.3 million over $178.2, showing a 9.6 per cent growth. What has impressed experts is the spectacular growth in exports to Japan, which went up 9.4 per cent to reach US$ 96.3 million, compared to US$ 88 million earlier. 

The industry also recorded a 20 per cent jump in exports to Korea, at US$ 29.2 million over US$ 24.3 million earlier. Exports to Mauritius logged in a 13.2 per cent increase to US$ 20.8 million, over US$ 18.4 million earlier. 

Inspired by the Prime Minister’s vision of 5F (Farm to Fibre to Factory to Fashion to Foreign), next year, we are organising India’s biggest textiles fair, Bharat Tex 2025, which will showcase the entire potential of India’s textile ecosystem, said Sekhri at a roadshow on Bharat Tex in Kolkata on Wednesday. 

"Global buyers and brands are eagerly waiting to source from India, and we have been doing roadshows within the country and in fashion capitals like Madrid, New York and London to invite them. The response from them is very encouraging,” he added. 

Global brands are increasingly eyeing India as a source and country of choice. “We need to capitalise and leverage India’s textile strengths. An event like Bharat Tex 2025 is expected to boost India’s apparel exports,” said Rohit Kansal, additional secretary, Union Ministry of Textiles.  

Tailor Made 

In the aftermath of the unrest in Bangladesh, global players who had invested in that country, have been taking a wait-and-watch approach. While many of them have stalled investment plans, some of them may even retreat, an apparel industry official told The Secretariat. 

When global brands began looking beyond China for an alternative sourcing destination, Vietnam emerged as a probable one. However, businesses do not take knee-jerk reactions. But with Bangladesh in turmoil, the need for a preferred destination has only accentuated. Coupled with its strengths, India, with its geographical proximity, stands a good chance at taking up the role, the official added.   

But if India has to take up the mantle, the industry needs to make substantial investments in capacity expansion, add to India’s capabilities in design and skilling, and improve its sustainability and certification processes. 

In key developed markets of the EU, stringent norms like carbon border adjustment mechanism (CBAM), and more recently, e-passport, are being imposed. These relate to the ability to track a product's history and journey through the supply chain, from raw materials to the end consumer. 

The need of the hour is to prepare a digital database of garment manufacturers and exporters. But given the size and fragmented nature of the industry, this is proving to be both time consuming and challenging, apparel industry experts said.  

The textile industry contributes 2 per cent  to India’s GDP, second only after agriculture. The sector currently employs 4.6 crore people, which is expected to go up to 6 crore by 2030. The industry is currently estimated at US$ 176 billion, Union Textiles Minister Giriraj Singh said in Kolkata, adding that the government has set a turnover target of US$ 350 billion by 2030. 

This would include US$ 100 billion from exports, up from US$ 40 billion at present. Of this, a significant portion will come from the RMG segment, he added, urging hosiery units to gear up and make innerwear exports contribute to a fair chunk of exports. 

A Stitch In Time 

With India fast emerging as the preferred sourcing destination for international buyers and big brands, the RMG industry is seeking further government support for the labour-intensive sector to offset high capital costs. 

Over Rs 1 lakh crore worth of investment is likely to be pumped into the sector over the next five years through Production Linked Incentives (PLI) schemes, PM Mitra parks and Samarth Schemes, while different states are also competing in offering attractive capital subsidy refunds. 

“I am hopeful that the growth momentum will continue. We have requested not only for a continuation of the interest equalisation scheme, but also for an enhancement of the interest equalisation rate to 5 per cent for all exporters for at least five years, to offset high cost of capital, Mithileshwar Thakur, Secretary General, AEPC told The Secretariat. 

In the industry's seven-point charter, its wish-list includes flexibility in fabric import, PLI 2.0 for capacity augmentation, an Urban Area Employment Encouragement Scheme, incentive for environmental, social, and governance (ESG) compliance, level playing field in important markets such as EU, etc. 

The industry has thus requested the government to lower the threshold for PLI schemes for garment manufacturers, which is currently at Rs 100 crore, which only attracts big players, not MSMEs. "If it can be lowered or there is a Rs 25 crore-threshold for garment makers, the sector can grow exponentially," said Thakur.

“The supply chain is getting re-aligned due to the Bangladesh crisis and global buyers looking for an alternative to China. Additionally, ongoing wars have disrupted traditional trade routes, adding to the cost burden. This is an appropriate time for the government to whole-heartedly support this labour-intensive, MSME driven sector through hand-holding, capacity augmentation, skilling, investment and sustained financial support,” he added. 

The incoming Trump administration is also expected to aid India over China. A recent report of the US International Trade Commission (USITC) has highlighted India’s reliability as a supply base, citing factors like political stability, product differentiation, ESG, sustainability and circularity, and high-skill production, compared to countries like Bangladesh, Cambodia, Pakistan and Sri Lanka.  

On its part, India needs to align its consumption ratio in garments with Europe. “We are currently at a ratio of 60:40 in cotton to man-made fibres (MMF), while Europe has a 70 per cent tilt towards MMF. We are seen as cotton-centric. If we align with Europe, it will help us get orders in workwear, sportswear, etc. Technical textiles, which cover MMF garments, have a lot of scope for growth. We need to up our game. But for this, the entire value chain will have to work together," Thakur said. 

(The writer is a veteran journalist. Views are personal)