Apparel Sourcing From India and China

                                                                                         

In the post-quota era, India and China are emerging as the major hubs for global apparel sourcing, mainly to U.S.A. and the European Union.

There are several factors which led to this development. The vast size of the Indian textile industry and its competitiveness make it one of the world’s leading apparel exporters. India has vast sources of raw materials. Labor costs are low in India. Indian traders have a wealth of entrepreneurship, designs and experience, which enable them to produce and apparel of high quality. Changes in the policies of the Indian government have opened up the Indian economy to the outside world, which has led to a rise in exports. Indian textile firms are quick in making changes such as expanding their capacity and adopting new technology, keeping in view the growing demand for Indian apparel all over the world. India has a large source of cotton domestically. About 75% of India’s exports are cotton items.

Reputed foreign traders like J.C. Penney, Wal-Mart, Gap, Marks & Spencer and others source apparel from India. No other country except for China can quite match the Indian textile industry. In the year 2005, after the abolition of the quota system, Indian exports to U.S.A. grew by 34% and exports to the European Union went up by 30%. Most of India’s exports are to U.S.A. and the European Union. Both of them together account for around 70% of India’s exports. In the year 2005, India ranked 3rd in apparel exports to U.S.A. and 5th in apparel exports to the European Union. The total textile exports of India were 8568.61 million USD for the period April-October 2005, which rose to 9022.61 million USD in April-October 2006, recording an approximate 5.3% growth.

Indian apparel exports are rising; however they are still behind China in this respect. U.S. imports of apparel from India rose from 2976.18 million USD in January-December 2005 to 3186.90 million USD in January-December 2006, which reflects a growth of about 7%. U.S. apparel imports from China rose from 15142.87 USD in January – December 2005 to 18517.52 million USD in January-December 2006, reflecting a growth of about 22%.

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