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Internal factors of India that may impact apparel export industry in 2019

by Dheeraj Tagra

04-January-2019  |  5 mins read

apparel export industry

In the second article of year-end series, Apparel Resources explores internal aspects that are expected to have a major impact on Indian apparel export industry in 2019. Though most of the Indian apparel exporters have learned to live and survive amidst this various garland of thorns, 2019 looks even more difficult with many major developments on the cards, be it policy level developments in India or unpredictable issues at global level.

The coming year is definitely going to be full of action at global as well as national level and will have an impact on business. As far as internal developments are concerned, 2019 will see the national election and things will depend on who comes to power and with how much of majority/strength.

General elections always have an impact on business and Government policies also determine how well the Government envisages the importance of an industry. Though major chunk of the industry feels that whoever forms the new government, industry will suffer as usual as none of the government really focuses on apparel export industry.  

Till the elections are over, one can expect the Rupee to continue falling against the Dollar. If that happens, then the business will be good for the exporters, even if it is not so good for the country. However, with the general elections, industry hopes that the situation will improve more with better policies coming up. There are two sides to a story… time before the elections always results in unnecessary delays in policies being finalised and scheme announcements being made.

It becomes more important in the light of the long pending integrated textile policy, which is a new industrial policy targeted to replace the three-decades old existing policy. It has already been sent for the Union Cabinet’s consideration. This policy is proposing a new regime that aims to attract US $ 100 billion of foreign direct investment (FDI) annually.

Another important issue, apparel manufacturing or export industry can see is more tilt towards domestic market as in 2018, many big- and medium-sized exporters entered or increased their focus on domestic market. Rather than exploring any new or emerging market at a global level, it is comparatively far better for Indian exporters to encash opportunities in Indian domestic market.

As of today, the Indian fashion retail is worth US $ 49 billion and is projected to reach US $ 75 billion by 2025. The first ever e-commerce policy of India is also expected to be announced in 2019, which can also attract Indian exporters to focus more on domestic market.

New industrial policy: This should be based on real-time data, collected by involving all the industrial clusters’ representatives instead of collecting information from few industry organisations as it used to be earlier.

Integrated textile policy: This needs to be given a fresh look to correct all the prevailing anomalies by involving real representations from the cluster-wise data.

The problem is not in defining what the policies should be about, rather it’s about the execution. Unless the benefits of the policy reach the grass-root level, the industry cannot truly grow.

The policy decision will have an impact on apparel exporters and apparel manufacturers for domestic market also, but as both the segments are quite divided in India, stay tuned for specific analysis for domestic market and other issues like global development that can impact Indian apparel industry in 2019.  

“Every factor that Apparel Resources has raised can have and will have some impact on apparel industry but the most important need of the industry is to reform the labour laws and ensure a level playing field for the industry against our competing countries like Bangladesh, Vietnam etc.,” Vijay Agarwal, Chairman, Creative Group