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Is India Really an Opportunity for Apparel Sourcing? Video

Reeling garment manufacturers the world over are trying to bring factories back online after lockdowns forced doors closed and cancelled orders forced a cash-flow crisis that left many workers without pay.

The new concern as brands and retailers look to rebalance what has become both a supply and demand plight, is whether a rush to resume too soon, without the right measures in place, could spell greater catastrophe for fashion down the line.

“I think there’s a very fine balance between making sure that the factories are operating and keeping workers employed, and taking a calculated amount of risk to ensure delivery and quality commitments are met. But of course this could go horribly wrong if the factories get over aggressive in attempting to come back,” Arjun Puri, director of Kas Group Asia, an India-based manufacturer and the exclusive sourcing arm of Kmart Australia and Target Australia, told Sourcing Journal in its latest ‘On the Ground’ video.

Ninety-five percent of Kas’ supplier base on the Indian subcontinent has gone back to work, but capacities at the factories range from 30 percent to 70 percent, depending on their pre-pandemic orders booked and how impacted their client base has been. “With their backs to the wall, I must admit there is a real concern whether factories might take a risk too many, and then that just might land us in a bigger problem.”

If a single COVID-19 case surfaces in a factory, the facility will have to be shuttered and sanitized, meaning production runs would again be paused. And with social distancing protocols challenging to enforce in and around factories, plus testing still not as widespread as it could be in many key sourcing countries, the risk of new or escalating cases remains real.

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But beyond the immediate dousing of supply chain fires and shoring up against short-term risk, companies are looking to India as one option for new sourcing opportunities as more turn their backs—at least partially—on China.

Despite news of new land access in the country, however, Puri says India’s potential rests on a few other factors.

“I’m not even sure there is a current opportunity here,” he said. “Now that may sound a bit odd given you’re hearing a lot of noise about people wanting to rebalance supply chains out of China, and the reason I say that is…because if you throw everything into the mix, at this point, the only sure guaranteed outcomes you can get in terms of delivery and quality are from three countries: it’s China, Vietnam and Cambodia. And India is not on that list yet.”

Outlining what it’s going to take for India to get there, Puri said wading through the wearying waters of the pandemic will be the first step—or the next test for India’s readiness to take on more apparel manufacturing.

“I think customers are going to look at how India gets out of lockdown and how soon they come back to full speed, and that is still playing out,” he said.


Check out more in Sourcing Journal’s new ‘On the Ground’ video series, which brings new and needed voices in the supply chain to the fore.