As the world inches towards rapid globalisation wrapped in the stoic blanket of modernism and growing awareness of the other in each individual, solutions to many problems across the globe are being answered with several minds put together. But this increased accessibility has a flip side to it, and the complications of the global trade and commerce dynamics are the biggest exposition of the same. Global trade in textile and apparel in 2018 was around US $ 820 billion of which apparel trade constituted about US $ 473 billion, showcasing the promising future the industry has. But globalisation has put an end to the conventional buying practices, that previously were only governed by the economics of the supply chain.
Traditionally, decision about where to buy was based on price alone. However, now other factors like FTAs (Free Trade Agreements), trade policies, political stability, currency exchange rates, inflation rates affect the trade in a major way, and the cheapest countries with highest qualities are also affected negatively.
Trends like nearshoring and onshoring, under which brands plan to buy from their own country or nearby countries, will further affect major sourcing decisions. These factors are pushing the retailers and brands to rethink about their future sourcing investments and partners.
Talking about India’s stance on the matter, Pallab Banerjee, Group President, Pearl Global, says, “The export market still has a lot of opportunities for collaborating together, and there are challenges that need to be addressed sooner than later. Due to the geo-political tension across the globe, there are many opportunities India can take advantage of, but that’s not happening.”
Sharing the same perspective, Gaurav Singh, CEO, Creative Group, asserts, “The current geo-political scenario where the two big trading blocks which are China and the USA are trying to sort out their differences over trade imbalances, will eventually result in new alliances and trade deals being forced with new partner countries.” He also deems India to be in a unique position as a prospective partner for the US and Europe trading blocks owing to a complete home-grown infrastructure which includes yarns to the final ready products, supported by a sound economy. “All retailers will look to divide their risks even if it comes at a slightly higher cost in India as compared to Bangladesh or China,” he adds.
Pallab also shares that the three major changes that are becoming catalytic in changing the smallest of segments of apparel supply chain are the geo-political trade issues that caused the dwindling position of China and the rise of countries like Vietnam and Bangladesh; the constantly evolving raw material preferences, as the affinity towards cotton changed to that for polymerised fabrics and finally for polyester today; and finally, the dynamic retail environment which will either build or break due to the advent of automation and e-retail.
However, it is being unanimously opined that the manufacturer is the key player in the enhancement of the supply chain amidst major changes. “The future manufacturing landscape will primarily be based on two principles: first being product design in India; and second, the allocation of respective manufacturing location based on simply what can be made in India and what can be made outside India,” Gaurav avers. This clearly means the empowerment of the manufacturer, as conglomerates and sourcing bodies no longer want manufacturers; they aim to find solution providers, who can boost their sales based on design which is targeted for a specific buyer.