In order to increase India’s garment exports, think tank Global Trade Research Initiative (GTRI) has proposed the following measures: expanding the products covered and relaxing the criteria in the textile production linked incentive (PLI) scheme; overhauling the Directorate of Foreign Trade (DGFT) and Customs procedures; and addressing monopolistic practices of domestic suppliers. The goal of these measures is to allow domestic manufacturers to become competitive.
It was pointed out that import limitations, complicated procedures, and domestic vested interests are impeding the expansion of the Indian garment sector’s exports. It was stated that the main causes of the problems faced by exporters include finding high-quality raw materials, especially synthetic fabric.
In 2023, China exported US $ 114 billion worth of garments, followed by the EU with US $ 94.4 billion, Vietnam with US $ 81.6 billion, Bangladesh with US $ 43.8 billion, and India with just US $ 14.5 billion. “This shows India significantly trails behind,” said Ajay Srivastava, co-founder, GTRI.
Bangladesh’s garment exports increased by 69.6 per cent, Vietnam’s by 81.6 per cent, and India’s outbound shipments by 4.6 per cent between 2013 and 2023. Consequently, from 2015 to 2022, India’s worldwide market share in the apparel trade decreased. The percentage of clothing that is knit fell to 3.10 per cent in 2022 from 3.85 per cent in 2015, while the percentage of clothing that isn’t knitted fell to 3.7 per cent from 4.6 per cent. According to Srivastava, QCOs have made the MMF supply chain less competitive by restricting access to reasonably priced and specialised raw materials. Additionally, the Bureau of Indian Standards takes a long time to register international suppliers, which forces exporters to pay more for goods from domestic monopolies.
The survey claims that Indian exporters face daily challenges, in contrast to those in Bangladesh and Vietnam, where exporters can readily obtain high-quality imported fabrics.
“High import duties on fabrics, coupled with DGFT and Customs; intricate procedures, force exporters to meticulously account for every inch and type of fabric imported,” he said. Garment imports rose 47.9 per cent between 2018 and 2023 while India’s textile imports increased 20.86 per cent during the period.
According to GTRI, companies need to obtain advance authorization from DGFT in order to import duty-free inputs for export production. The directorate currently mandates that any unused authorizations that are turned in to them come with a non-utilization letter or certificate from Customs, which raises the cost of the transaction.
