India's readymade garment exports to surpass USD 30 billion by 2027: Report
Nov 22, 2022
New Delhi [India], November 22 : Having adequate raw materials and a large workforce, India is poised to grab the opportunity in the global readymade garments market.
Indian readymade garments exports are expected to surpass the USD 30 billion mark by 2027, thus translating into a 4.6 to 4.9 per cent share in world exports as against the current share of around 3 per cent, said rating agency CareEdge in a report. The Indian readymade garment exports have been stagnant at around USD 15-17 billion in the past five years ended 2021.
"India has a very good presence across the cotton textile value chain from fibre to fabric, while it has a limited presence in man-made fibre, which is expected to get a boost by expected FTA with the UK and production-linked incentive scheme. Furthermore, having presence across entire-value chain reduces transportation costs and lead time, thereby providing a cost-effective solution to the customers," said Krunal Modi, Associate Director - Corporate Ratings in the report.
With free-trade agreements, it said India's share in UAE and Australian markets are expected to increase and the trade pact with the UK would be a game changer as it will create a level playing field.
"Currently, India has a market share of 4-5 per cent in EU and UK as Bangladesh, Vietnam and Pakistan have a tariff advantage of around 10 per cent vis-a-vis India in some of these markets," the report said.
Due to its declining competitiveness and the 'China Plus One' sourcing strategy adopted by global brands and retailers, China is expected to continue losing its share in the global markets, which could be beneficial for India.
Countries such as China, Bangladesh, Vietnam, Germany, Italy, Turkey, Spain and India dominate the export market, with China accounting for a lion's share of 33 per cent of the total exports backed by high labour productivity along with economies of scale.
