Is India the sleeping giant of apparel and textile sourcing?
With a long heritage of manufacturing for the clothing and home goods market, but without some of the dynamic growth of Vietnam, Bangladesh or Cambodia in recent years, the world’s second-most-populous nation might just be poised to take a key role in global sourcing amid the controversies surrounding China.
Whether it has “Vertical Viability: The Upsides and Challenges of Sourcing in India,” as was the title of the Souring Journal Summit panel, is the question. According to five experts in souring in India, the answer seems to be yes, with caveats that include more government support, industry commitment to invest and whether it can avoid geopolitical and production risks.
Moderator Edward Hertzman, president and founder of Sourcing Journal, asked the panelists how India can position itself to capture more business, given that it has the labor force, raw materials, factories and ability to produce various categories.
Hande Diltemiz, managing director of production, India and Sri Lanka, for H&M Group, said India does have all the fundamentals, but it is now time to adopt a new customer demand, which is a high-quality product that is sustainable.
“The brands want to source from a market where they can find strong sustainability ambitions and most importantly, action,” Ditemotz said.
She said this includes reduction in CO2 emissions, an inclusive and diverse workforce, renewable energy investments, sustainable material resources and short production lead times.
Arjun Puri, director of KAS Group Asia, said logically there is nothing that India lacks that would hamper more apparel manufacturing and exporting happening there.
“There is something that prevents us from realizing this opportunity and part of the problem is that Indian manufacturing has never really…played to the mass segment, where there is so much opportunity right now with the consumer seeking value,” Puri said.
U.S. imports from India fell 32percent to $2 billion year to date in 2020 and were down 18 percent to $256 million in value in the month year over year, but declined just 2.9 percent in volume to 82.16 million SME in August from a year earlier.
Puri said India has much to offer as far as raw materials, production capabilities, logistics and workforce, but it has always played to the higher-end European market. Puri said India can be well-placed to transition to the smaller, faster-turn production that many brands want today. He noted that the average Indian factory has about 300 to 800 machines which lends itself to this type of manufacturing.
Diltemiz said H&M is buying a wide array of products from India, including sportswear, accessories and home goods.
“That is the beauty and strength of India,” she said. “The product capability is very high. But adjustments need to be made in line with customer demands such as small quantities, short lead times, immediate reactions and always sustainability.”
Diltemiz said since sustainability is vital to H&M and the production partners is chooses, “we are very happy to hear and see that India is at the forefront in areas such as renewable energy initiatives.”
“But it’s not enough, “she said. “There is a lot to do to change the old environment of the textile and ready-made garment industry,” including improving working conditions.
Asked by Hertzman how supportive the India government has been of the apparel industry, Nitin Gupta, CEO of Maavi Global, said, “Primarily, the industry in India has come up despite the government and not thanks to it.”
“The government in India has not been very active unlike other countries,” Gupta said. “It has also been a very insular industry because everything that has been developed in India has been developed by the entrepreneurs. Unfortunately for us, when China joined the WTO, it scaled up about 30 times more rapidly than India.”
He said the government focused on areas like agriculture and automobiles and the apparel industry got left to fend for itself in a competitive landscape. However, recently the government has realized that the states are the ones that should show industry support and that has begun to help.
Also of late, India has stepped up production of personal protective equipment (PPE), and that has helped the government realize the potential and capabilities of the apparel industry, Gupta noted.
“India’s one big concern has been about execution and consistency of execution,” Venky Nagan, group CEO of Asmara Group, said. “There’s also a rich pool of talent now, smart young merchandisers that are cross-trained…that are working to think along with the customer. So, it’s the mindset and a new approach from the industry and I think the execution now is much better.”
Aamir Akhtar, CEO of lifestyle fabrics, denim for Arvind Limited, said India is well rounded as a raw materials supplier, with large capacities not just in cotton, for which it is known, but also in polyester and viscose. This includes recycled polyester and viscose fibers and fabrics.
“India has strength in raw materials, and I believe every country has to play on its strengths,” Akhtar said. “India also has to attract and partner with the right retailers and brands.”
Panelists said India’s textile imports are low due to its strong local industry, but it might have to look into importing more specialized materials for greater verticality to meet specific order requirements from brands and retailers.