Beruflich Dokumente
Kultur Dokumente
Management Consultants
14
International Conference and Exposition on Textiles & Apparel
THEME PAPER
Table of Contents
Foreword ....................................................................................................................................................... 2
1.
1.1.
1.2.
1.3.
2.
2.1.
2.2.
2.3.
Key Categories................................................................................................................................... 9
3.
3.1.
Manufacturing ................................................................................................................................ 11
3.2.
Domestic Market............................................................................................................................. 13
3.3.
3.4.
SWOT Analysis................................................................................................................................. 21
4.
4.1.
4.2.
4.3.
5.
Foreword
Texcon 2014 is the 3rd textile and apparel sector conference organized by Confederation of Indian
Industries (CII) in consecutive years. Since the first conference in 2012, Texcon has come a long
distance. Today it is positioned as one of the premier events in Indian textile and apparel sector
which is joined by decision makers from private as well as government sector. Since its inception, the
conference has not restricted itself to being a single day event. Deliberations held in Texcon have
always been taken forward to Government and industry fora for further action. Wazir Advisors,
which has been associated with Texcon as a Knowledge Partner since the first edition, has been
instrumental in supporting CII for representing the issues and recommendations. This differentiating
factor has brought immense support and appreciation to Texcon from all industry stakeholders. In
2014, Texcon has grown in its scope and format as well the conference proceedings will span 2
days and it will also feature a trade exhibition.
The present time in itself is vibrant. With a stable central government and receding macroeconomic
problems at global level, the country is in what we can call a propulsion phase. Textile and apparel
sector is no different. The optimism in sector should soon start getting converted to actual business.
India textile and apparel sector can, and needs to, play an increasingly larger role in countrys
economic growth by generating employment and through exports. The challenges for textile and
apparel sector nonetheless have not eliminated. On domestic front issues related to manpower and
procedural delay need urgent attention, while globally new nations are emerging in the list of largest
suppliers due to their FTAs and lower manufacturing costs.
It is in this setting that a relevant theme for Texcon 2014 has been chosen viz. Role of Indian Textile
and Apparel Sector in Changing Global Supply-Demand Scenario. This whitepaper on the conference
theme has been prepared by Wazir Advisors, which should act as the initiator for discussions to
come out with appropriate and implementable recommendations.
We look forward to have your active participation and welcome your invaluable inputs.
D. L. Sharma
Director
Conference Chairman,
CII Texcon 2014 &
Director
Vardhman Textiles
Prakash Bhagwati
Conference Co-Chairman,
CII Texcon 2014 &
Chairman
InspirOn Engineering Pvt. Ltd.
(Conference Co-Chairman)
Prashant Agarwal
Joint Managing Director
Wazir Advisors
(Knowledge Partner)
S. No.
1
2
3
4
5
6
7
8
9
10
Region
EU-27
United States
China
Japan
Brazil
India
Russia
Canada
Australia
Rest of the world
Total
Market Size
355
230
165
110
60
46
45
30
25
80
1,146
Within the top markets, there is a major distinction between developed countries and the
emerging ones in terms of per capita spend on apparel. The lowest per capita spend on
apparel among these markets is of India (US$ 37) which is only 4% of the highest one viz.
Australia (US$ 1,131).
Figure 1: Per Capita Spend on Apparel in 2013 (In US$)
1,131
37
India
122
163
China
Global
287
300
Brazil
Russia
703
725
EU-27
USA
885
887
Japan
Canada
Australia
China
India
165
150
141
120
101
13% CAGR
35
31
2009
2010
40
10% CAGR
2011
46
45
2012
2013
Very often, comparisons are drawn between the markets of China and India; but it is interesting
to note that per capita spend on apparel in India is only one-third of that in China. From 2009 to
2013, the per capita apparel spend in China grew at CAGR of 13% and reached US$ 122 by
2013. During the same period in India, the growth rate registered was approximately 9% and
reached US$ 37.
Figure 3: Change in per Capita Spend on Apparel by Chinese and Indian Consumers (In US$)
China
India
76
26
89
29
101
109
32
35
122
13%
37
9%
2009
2010
2011
2012
2013
The Chinese and Indian apparel markets are also different in terms of market segmentation into
mens, womens and kids wear. In China, womens wear is the largest category whereas in
India it is the mens wear. In fact, India is the only major apparel market where womens wear
is not the largest category in value terms. The reason behind this anomaly is the fact that
womens wear in India is largely dominated by traditional, unbranded dresses which in value
terms are lower than mens wear products, despite having larger volumes overall.
Figure 4: Chinese and Indian Apparel Market Segmentation
29%
25%
32%
40%
Men's wear
48%
35%
Kid's wear
China
India
Women's wear
Figure 5: Change in Per Capita Spend on Apparel from 2013 to 2025 (In US$)
1,709
1,265
1,149
1,131
887
885
725
841
817
756
703
460
300
383
287
122
Australia
Canada
Japan
USA
EU-27
2013
Russia
Brazil
China
37
129
India
2025
The projected growth in per capita apparel spend and population will cause the world apparel
market to grow at a CAGR of approx. 5% and attaining a size of approx. US$ 2.1 trillion by 2025.
Table 2: Apparel Market Size Projections from 2013 to 2025 (In US$ billion)
Region
EU-27
USA
China
Japan
Brazil
India
Russia
Canada
Australia
Rest of the world
Total
2013
355
230
165
110
60
46
45
30
25
80
1,146
2025
440
285
540
150
100
200
105
50
45
195
2,110
CAGR
2%
2%
10%
2%
5%
12%
8%
4%
5%
8%
5%
It is expected that by 2025, the cumulative size of Indian and Chinese markets will be higher
than that of USA and EU.
4% CAGR
643
558
2008
2009
751
728
2011
2012
642
2010
781
2013
China, 39%
India, 5%
Italy, 5%
Germany, 4%
Turkey, 4%
Others, 33%
USA, 3%
Bangladesh, 3%
Viet Nam, 3%
The European nations, in general, are seeing a decline in their textile and apparel exports.
Germanys exports has remained unchanged from 2008 to 2013, whereas Italys exports have
declined at a CAGR of -2% in the same period. India has emerged as the fastest growing large
exporter nation from 2008 to 2013. Its trade increased at a CAGR of 12% while China registered
growth of 7% CAGR in the said period.
Table 3: Historical Trade Pattern of Top 5 Exporting Nations
2008
2009
2010
2011
2012
2013
CAGR
China & HK
219
193
234
275
278
304
7%
India
23
22
27
33
33
40
12%
Germany
35
31
33
38
35
35
Italy
40
31
32
37
34
36
-2%
USA
23
18
24
29
27
27
3%
The top 5 textile and apparel importing nations are USA, China, Germany, Japan and United
Kingdom. USA is the single largest importer with a share of approx. 17% of the total global
trade.
USA, 17%
China, 9%
Germany, 8%
Japan, 7%
United Kingdom,
5%
Others, 47%
France, 4%
Italy, 4%
Indias share in several major apparel markets is quite low. An analysis of major apparel
importing nations of the world indicates that in several countries the Indias apparel exports is
negligible. The table below shows the major apparel importing nations where Indias share is
very low:
Table 4: Major apparel importing nations where Indias share is very low (Data for 2012, Value in US$ billion)
Global
Rank
Country
Import Value
Indias share
Japan
28.69
0.22
1%
10.34
0.06
1%
10
Russian Federation
9.85
0.04
0.4%
13
Canada
7.07
0.23
3%
14
Rep. of Korea
5.52
0.03
1%
15
Switzerland
5.39
0.06
1%
16
Australia
5.23
0.10
2%
17
Poland
5.07
0.08
2%
18
Austria
5.07
0.03
1%
In order to enhance the trade share exponentially, there is a need to promote Indian exports to
markets where our trade penetration is very low.
S.
No.
HS
Code
1
2
3
4
5
6
7
8
9
10
11
12
13
14
6204
6104
6110
6203
6109
6103
6115
6202
6205
6206
6201
6210
6108
6211
1
2
3
4
5
6
7
5407
6302
5201
5208
5402
5603
6006
Description
Apparel Categories
Suits, ensembles, jackets, blazers, etc.; woven; W/G
Suits, ensembles, jackets, blazers, etc.; knitted; W/G
Jerseys, pullovers, cardigans, etc.; knitted
Suits, ensembles, jackets, blazers, etc.; woven; M/B
T-shirts, singlets and other vests; knitted
Suits, ensembles, jackets, blazers, etc.; knitted; M/B
Pantyhose, stockings, socks & other hosiery; knitted
Overcoats, capes, wind-jackets, etc.; woven; W/G
Shirts; woven; M/B
blouses, shirts and shirt-blouses; woven; W/G
Overcoats, capes, wind-jackets, etc.; woven; M/B
Garments made up of felt or coated fabric; woven
Underwear, nightwear, etc.; knitted; W/G
Track suits, ski-suits & swimwear; woven
Other Categories
Woven fabrics of synthetic filament yarn, monofilament <88 Ne
Bed, table, toilet and kitchen linens
Cotton, not carded or combed
Woven cotton fabrics, >85% cotton, <200 gsm
Synthetic filament yarn (not sew thread), monofilament >88 Ne
Nonwovens, whether or not impregnated, coated etc.
Other knitted or crocheted fabrics
Trade
(US$ Bn.)
Indias
Share
46.1
41.2
39.2
34.9
33.9
15.9
13.6
13.4
11.0
10.9
10.9
10.9
10.1
10.0
5%
2%
0.7%
3%
8%
2%
0.5%
0.1%
10%
15%
0.2%
0.2%
5%
8%
22.5
19.8
16.3
16.0
15.2
13.9
13.3
6%
7%
28%
6%
9%
1%
2%
8
5205 Cotton yarn (not sewing thread), >85% cotton
12.6
38%
9
5903 Fabric impregnated, coated or covered with plastic
11.7
1%
10 6307 Made-up articles, including dress patterns
10.9
4%
* At 4 digit HS code, with trade >US$ 10 bn. in 2013. Data for 3 large exporters - Bangladesh, Vietnam and
Taiwan is not available
Data Source: UN Comtrade
Note: M/B Mens/Boys; W/G Womens/Girls
From the above table, it can be seen that there are several categories where Indian trade share
is very low. Such categories can be broadly classified as winterwear, outerwear, intimatewear,
and nonwovens. These are majorly synthetic fibre based categories. Indias strength at global
level is in cotton based categories (raw fibre and yarn) along with topwear (shirts, tops, t-shirts,
blouses, etc.).
Description
Spindles
Rotor
Capacities
490 lac
8 lac
Shuttleless Looms
1.2 lac
Powerloom
23 lac
Handloom
24 lac
10
3.1. Manufacturing
3.1.1 Fibre and Filament Production
Raw material availability is one of the key strengths of the Indian textile sector. India is
counted among the largest producer, consumer and exporter of several natural and synthetic
fibre. At an overall level India produces about 11 million tons of fibre and filaments annually.
The data in table that follows indicates that the fibre and filament production in India has
grown at a CAGR of 3% over last 5-years. A closer look at the statistics reveal that Cotton is the
only major fibre which has grown to some extent. The production of manmade filament yarn
and fibres, at consolidated level, in last 5 years has shown de-growth or stagnancy.
Table 7: Indian Fibre and Filament Production
2009-10
Filament:
Polyester
Viscose
Silk
Nylon
Polypropylene
Subtotal
Grand Total
2010-11
2011-12
2012-13
2013-14 (P)
CAGR
5,185
1,620
872
302
90
43
3
8,115
5,763
1,800
896
305
79
43
4
8,890
6,001
1,845
830
323
78
44
4
9,125
6,205
1,674
848
337
74
44
4
9,186
6,375
1,620
846
361
96
49
4
9,351
5%
0%
-1%
5%
2%
3%
7%
4%
1,434
43
20
30
15
1,542
9,657
1,462
41
20
33
13
1,569
10,459
1,380
42
23
28
13
1,486
10,611
1,288
43
24
23
17
1,395
10,581
1,213
44
26
24
13
1,320
10,671
-4%
1%
7%
-5%
-4%
-4%
3%
Data Source: Cotton Corporation of India; Textile Statistics & Official Indian Textile Statistics 2012-13, Office of Textile
Commissioner; Central Silk Board; Ministry of Agriculture; Jute Advisory Board
11
4,713
4,193
3,914
427
407
361
796
5,316
4,868
4,373
457
789
484
457
898
828
655
707
3,079
3,491
3,127
3,583
3,935
2,899
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14 (P)
Cotton
Blended
100% Non-Cotton
Data Source: Textile Statistics & Official Indian Textile Statistics 2012-13, Office of Textile Commissioner
54,966
768
20,534
6,766
60,333
812
22,840
7,767
62,559
798
60,453
848
21,765
20,567
8,278
8,468
62,792
843
63,468
843
18,797
17,049
9,282
10,063
26,898
28,914
31,718
30,570
33,870
35,513
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14(P)
Cotton
Blended
Data Source: Textile Statistics & Official Indian Textile Statistics 2012-13, Office of Textile Commissioner
12
The handloom industry provides direct and indirect employment to 7 million people. The
sector contributes 95% to the worlds hand woven fabric production. In 2013-14, Indian
handloom industry produced 7,116 million square meter fabric which accounted for 11% of
the total fabric production in the country. However, the production of hand woven fabric has
remained almost stagnant in last few years.
Handicrafts contribute substantially to employment generation and exports. The sector is
estimated to employ about 8 million artisans. The exports of handicrafts including handmade
carpet is US$ 3,885 million in 2013-14, growing at a CAGR of 21% for last five years.
Apparel
Home Textiles
Technical Textiles
US$ 46 billion
US$ 4 billion
US$ 13 billion
25
27
2007
2008
31
2009
40
35 11% CAGR
2010
2011
45
46
2012
2013
13
In terms of segmentation, Indian Apparel market is dominated by mens wear which has a
majority share of approx. 40%. Womens wear comes next with a share of approx. 35%
followed by kids wear which has a share of approx. 25%.
Figure 13: Indian Apparel Market Segmentation
Kid's wear
25%
Men's wear
40%
Women's wear
35%
Within India, North, West and South are larger consumption bases owing to higher per capita
income, affluence level and propensity to spend. Climatic conditions also play a critical role
pushing sales in North, as the region witnesses acute summers as well as acute winters forcing
consumers to maintain a separate wardrobe for each season. An estimate of regional split is
given in table ahead.
Table 8: Region-wise Split of Indian Apparel Consumption
Region
Market share
North India
35%
West India
25%
South India
25%
East India
15%
While the Indian consumers disposable income and awareness about brands have increased
in recent years, yet the unbranded apparel form the major chunk of market, approx. 70%. The
main reason behind this is the low level of brand penetration in rural parts of India. However,
there is a clear trend of higher growth of branded segment than the unbranded one.
14
Apparel Market
US$ 46 Bn.
Urban
Rural
55%
45%
(US$ 25 Bn.)
(US$ 21 Bn.)
Branded
Unbranded
Branded
Unbranded
45%
55%
10%
90%
(US$ 11 Bn.)
(US$ 14 Bn.)
(US$ 2 Bn.)
(US$ 19 Bn.)
12% CAGR
2008
2009
2010
2011
2012
2013
2007
Source: Wazir Advisors
The home textiles market is dominated by the unorganized sector (95%) which is catered by
small niche players and street markets.
15
Organized Market
Unorganized Market
(5%)
(95%)
Category
Specific
Retailers
Niche Players
General
Retailers
Hypermarkets
(Big Bazaar,
Hypercity)
Small Niche
Players
Street
Markets
Departmental
Stores
(Lifestyle,
ShopperStop)
In home textiles market, the largest share is of bed linens, followed by curtains, upholstery,
towels, rugs & carpets, blankets and kitchen linen.
Figure 17: Indian Home Textiles Market Segmentation
Kitchen linen, 6%
Bed Linen, 37%
Blankets, 7%
Towels, 11%
Curtains, 16%
Upholstery, 13%
Source: Wazir Advisors
16
Figure 18: Historical Growth of Indian Technical Textiles Market (In US$ bn.)
13
12
11% CAGR
2007-08
2008-09
2009-10
11
10
2010-11
2011-12
2012-13
2013-14(P)
Data Source: Baseline Survey of the Technical Textile Industry in India, Office of Textile Commissioner
Note: 1 US$ = Rs. 60
Based on end-user application, the technical textile market is segmented into following 12
categories:
S. No.
Category
Application
Agrotech
Buildtech
Clothtech
Geotech
Hometech
Indutech
Meditech
Mobiltech
Oekotech
Environmental protection
10
Packtech
Packaging
11
Protech
12
Sportech
The top five categories of technical textiles, i.e. packtech, clothtech, hometech, indutech and
mobiltech have a combined share of approx. 80% in the market. The other six categories
contributes only 20% in the technical textiles market.
17
Geotech &
Oekotech, 1%
Agrotech, 1%
Protech, 3%
Packtech, 38%
Meditech, 5%
Buildtech, 5%
Sportech, 6%
Clothtech, 12%
Mobiltech, 9%
Indutech, 10%
Hometech, 10%
Data Source: Baseline Survey of the Technical Textile Industry in India, Office of Textile Commissioner
781
728
642
504
363
304
8
1995
11
2000
17
2005
India Exports
27
2010
33
2012
40
2013
Global Trade
India is a net exporter in the textile and apparel segment. In 2013, India imported US$ 5 bn.
of textile and apparel goods against an exports of US$ 40 bn. worth exports. The historical
growth rate of exports is also higher than that of imports.
18
(US$ Billion)
2008
2009
2010
2011
2012
2013
CAGR
Exports
22.7
21.9
27.1
33.4
32.7
40.2
12%
Imports
3.6
3.2
3.9
4.9
5.2
5.4
9%
Others incl.
carpets,
nonwovens,
etc., 6%
Made-ups, 12%
Apparel, 40%
Fibre, 12%
Yarn, 18%
Fabric, 12%
Data Source: Office of Textile Commissioner
In Indian imports, fibre is the largest segment with 24% share followed by fabrics with a share
of 22%. Most of the products in these categories are specialty fibres and fabrics which are
either not made or made in very less quantities in India.
Figure 22: Break-up of Indias Textile & Apparel Imports (2013-14)
Others incl.
carpets,
nonwovens,
etc., 19%
Made-ups, 7%
Fibre, 24%
Apparel, 8%
Fabric, 22%
Yarn, 20%
Data Source: Office of Textile Commissioner
19
USA, 18%
China, 14%
UAE , 7%
Others, 43%
UK , 6%
Bangladesh, 5%
Germany, 5%
France, 3%
China is the largest supplier of textile and apparel to India with a share of 47%. The imports from
China are diverse, from fibre to garments all types of products are being imported.
Figure 24: Market-wise segmentation of Indian T&A Imports (2013)
China, 47%
USA, 5%
Bangladesh, 5%
Taiwan, 4%
Others, 30%
Australia, 4%
Rep. of Korea, 3%
Germany, 3%
20
ii.
Country
2009
2011
2013
China
173
193
220
India
121
135
150
Thailand
295
329
390
Philippines
379
423
440
Indonesia
148
165
180
To address the rising demand for skilled manpower in textile and apparel sector, Government
of India has launched Scheme for Growth and Development of Technical Textiles (SGDTT) and
Integrated Skill Development Scheme (ISDS) for the textiles and apparel sectors. The Schemes
focus on building capacities of institutions providing skill development and training in the
sector. Indias large population base with government initiatives ensures proper and
economical availability of trained manpower to the sector.
iii.
21
Level 1
Level 2
Fibre
Manufacturing
Spinning
Level 3
Weaving/
Knitting
Level 4
Processing
Level 5
Garment
Manufacturing
Filament Manufacturing
Weakness:
i.
ii.
Lower efficiency
Productivity levels in India are low compared to peers including China, Bangladesh, Turkey, etc.
22
7,576
5,567
5,169
5,042
3,238
India
China
Vietnam
Cotton Garments
iii.
India
12
China
Vietnam
Bangladesh
iv.
23
Opportunities:
i.
ii.
Threats:
i.
Country
USP
China
Turkey
Italy
Germany
Sri Lanka
Product focus
Bangladesh
Bangladeshs apparel exports has already surpassed that of India. Vietnam in last few years has
also gained higher market share in global trade. On the same hand, Myanmar and Ethiopia are
receiving attention from the global investor and buyer community. All these countries will pose
a tough competition to Indian in near future.
24
Polyester
Others
Cotton
70,000
60,000
50,000
40,000
30,000
20,000
10,000
2000
2005
2007
2010
2015 (P)
2020 (P)
Polyester is now by far the dominant textile constituent in most end use sectors requiring
manmade, including predominantly, apparel but also home textiles and industrial-technical
textiles. By virtue of price, performance and scale it is gradually taking the market shares of the
more expensive.
Figure 29: Global Man-Made Fibre Segmentation (2012)
Apparel
Industrial
Textile
16%
Home
Textile
24%
Polyester
85%
Nylon
5%Acrylic
4%
Viscose
6%
Polyester
91%
Acrylic
1%
Viscose
21%
2012 Total
31,332 KT
Acrylic
Nylon
4%
2% Viscose
3%
Nylon
15%
Polyester
63%
Apparel
60%
2012 Total
51,920 KT
Home Textile
Industrial Textile
Polyester
2012 Total
8,216 KT
Nylon 6 & 66
2012 Total
12,372 KT
Acrylic
Viscose
Industrial
8%
Polyester
83%
Nylon
6%
Acrylic
4%
Home
27%
Apparel
65%
Viscose
7%
2012 Total
49,453 KT*
Excludes PP
& Others
Industrial
43%
Apparel
50%
Industrial
5%
Apparel
65%
Home
30%
Home
9%
Home
7%
2012 Total
41,080 KT
2012 Total
2,859 KT
2012 Total
1,872 KT
Apparel
46%
Industrial
45%
2012 Total
3,642 KT
Market
Trends1
Trends 2
25
Indian textile industry, however, is primarily cotton focused with cotton accounting for nearly
55% of total fibre consumption in 2012. But consumption of polyester fibre is gaining
momentum due to factors like fluctuation of cotton prices, increased presence & sourcing by
global brands where polyester fibre dominates, growth of womens wear segment, growth of
value retail etc.
Figure 30: Fibre Consumption Trend in India
60%
59%
59%
59%
58%
56%
55%
34%
35%
35%
35%
36%
37%
38%
6%
6%
6%
6%
6%
7%
7%
2000
2007
2008
2009
2010
2011
2012
Cotton
Polyester
Others
Indias overall share in global textile and apparel trade is about 5% in 2013. However, out of
total 864 textile and apparel commodities traded in 2012 there are 317 commodities in which
India had a share less than 1%. Collective trade in these commodities is approx. US$ 208 bn.,
while Indias trade in them is only US$ 385 mn. (0.19%).The untapped opportunity remains in
MMF based product categories, which can give an exponential growth to Indias export of
textile and apparel.
Table 12: Indias Trade Share in Top Traded MMF based Apparel Categories (2012)
Category
Jerseys, pullovers, cardigans, waistcoats
Overcoats, capes, cloaks, wind-cheaters, etc.
Overcoats, capes, cloaks, wind-cheaters, etc.
Dresses
Trousers, bib and brace overalls, breeches
and shorts
Blouses, shirts and shirt-blouses
Dresses
Knitted
Woven
Woven
Woven
Total
Trade
(US$ Bn.)
18.05
6.58
5.94
5.1
Indian
Trade
(US$ Bn.)
0.03
0.001
0.001
0.35
0.20%
0.02%
0.02%
6.90%
M/B
Woven
4.85
0.07
1.40%
W/G
W/G
Woven
Knitted
4.3
4.07
0.37
0.06
8.60%
1.50%
End
user
Type
M/B
W/G
W/G
Share
26
Till 2000, fibre consumption at global level was majorly cotton focused. By 2030, it is expected
that consumption of polyester will be more than double to that of the cotton fibre.
Figure 31: Global Fibre Consumption Trend
37%
36%
27%
43%
36%
21%
2000
2007
44%
46%
48%
36%
35%
33%
20%
19%
2008
2009
Cotton
19%
2010
Polyester
50%
31%
19%
2011
50%
31%
18%
2012
59%
52%
30%
Widening
gap
27%
18%
14%
Others
Volatility and upward trend of cotton price has already pushed the fibre mix in favor of
Polyester for major apparel and home textile products. Following are the few major trends
which will help increased consumption of Polyester fibre in Indian domestic market:
Increasing women participation in workforce will push the demand of western office wear,
party dresses as well as lingerie
Indias large young population base with increasing awareness towards fitness will increase
the consumption of active-wear / sportswear
Awareness of Indian women towards health and hygiene will cause increased women
hygiene product usage
Indias emergence as global automobile manufacturing hub will surge the demand of
technical textile products like seat belts, airbags, seat covers and headliners
Stricter compliance norms and increasing workers awareness towards health and safety will
create large demand for protective wear products
27
In the US market, China and Hong Kong increased trade share from 16% in 2000 to 40% in 2013.
Vietnam increased its share from 0.1% in 2000 to 8% in 2013, making it the second largest
exporter to the US market after China. The share of India has also increased from 4% to 6% in
the same period. The next two top importers viz. Bangladesh and Indonesia have also increased
their market shares. At the same time, the share of Mexico, which is the next largest exporter,
has declined drastically from 14% to 4%.
Table 13: Share of Top 10 Suppliers in US Market
2000
Supplier
Share
China & HK
16%
Mexico
14%
Canada
5%
S. Korea
4%
Taiwan
4%
India
4%
Domi. Rep.
3%
Thailand
3%
Indonesia
3%
Honduras
3%
Total
59%
2005
Supplier
Share
China & HK
29%
Mexico
8%
India
5%
Indonesia
3%
Pakistan
3%
Vietnam
3%
Canada
3%
Honduras
3%
Bangladesh
3%
Italy
2%
Total
64%
2010
Supplier
China & HK
Vietnam
India
Indonesia
Mexico
Bangladesh
Pakistan
Honduras
Cambodia
El Salvador
Total
Share
41%
7%
6%
5%
5%
4%
3%
2.6%
2%
2%
78%
2013
Supplier
Share
China & HK
40%
Vietnam
8%
India
6%
Indonesia
5%
Bangladesh
5%
Mexico
4%
Pakistan
3%
Cambodia
2%
Honduras
2%
El Salvador
2%
Total
78%
In the EU market, China is again the largest exporter whose share has increased from 22% in
2000 to 38% in 2013. Turkey, the second largest exporter has maintained its market share at
28
14% in 2013. The share of Bangladesh in the overall textile and imports to EU 28 has increased
from 4% in 2000 to 11% in 2013 while India has maintained its share at 7%.
Table 14: Share of Top 10 Suppliers in EU-28 Market
2000
Supplier
China
Turkey
India
Tunisia
Bangladesh
Morocco
Indonesia
USA
Rep. of Korea
Switzerland
Total
Share
22%
13%
7%
5%
4%
4%
4%
4%
3%
3%
69%
2005
Supplier
Share
China
34%
Turkey
17%
India
8%
Bangladesh
5%
Tunisia
4%
Morocco
3%
Pakistan
3%
Indonesia
2%
Switzerland
2%
USA
2%
Total
80%
2010
Supplier
Share
China
42%
Turkey
13%
India
8%
Bangladesh
7%
Pakistan
3%
Tunisia
3%
Morocco
3%
Viet Nam
2%
Indonesia
2%
USA
2%
Total
84%
2013
Supplier
Share
China
38%
Turkey
14%
Bangladesh
11%
India
7%
Pakistan
3%
Tunisia
3%
Morocco
2%
Viet Nam
2%
Cambodia
2%
Indonesia
2%
Total
84%
The concentration of textile and apparel imports to both the US and EU 28 market has
increased, with top 10 supplier countries reaching 78% and 84% respectively in 2013.
Supply chain rationalization has led to the global consolidation in textile and apparel sector. The
buyers are now seeking for a long term arrangement with fewer suppliers that have capabilities
to support their operations. Consolidation of supplier base results in lower purchased costs (i.e.
shipping, handling, taxes and duties/fees, etc.) and reduced procurement and supplier
management cost fees. Beyond cost savings, it also results in increased stake-holder
satisfaction in form of better discounts, fraud reduction and better quality.
29
USA and Vietnam signed a bilateral trade agreement on July 2000 which came to force on
December 2001. Since then, Vietnam has become a significant trade partner for the US.
Vietnam is the second largest source of US clothing imports after China. From US$ 48 million in
2001, the US import of apparel from Vietnam has increased to US$ 8,126 million in 2013 at an
impressive CAGR of 53%.
Figure 33: US Apparel Imports from Vietnam (In US$ million)
Before FTA
After FTA
53%
19%
8,126
4,359
2,375 2,562 2,725
5,223 5,068
5,877
6,644
7,101
3,222
895
17
47
48
1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Data Source: Office of Textile and Apparel (OTEXA)
Bangladesh has been a WTO member since 1995 and benefits from the EU's "Everything but
Arms" arrangement, which grants duty free, quota free access for all exports, except arms and
ammunition. The EU works closely with Bangladesh in the framework of the EU-Bangladesh Cooperation Agreement, concluded in 2001. Taking advantage of these arrangements, Bangladesh
exports of apparel to EU-27 region has significantly increased from US$ 3.3 billion in 2000 to
US$ 12 billion in 2013 at a CAGR of 11%.
Figure 34: Bangladesh Exports to EU-27 (In US$ million)
12,234
CAGR: 11%
7,819
3,264
2000
4,458
2005
2010
2013
30
Even Indian textile and apparel exports have been able to gain faster growth in Japanese
market since India Japan Comprehensive Economic Partnership Agreement (IJCEPA), with
increase of 37% overall exports in the year 2011-12 immediately after the agreement.
Figure 35: Indias Textile and Apparel Exports to Japan (In US$ Million)
Before CEPA
After CEPA
11%
420
5%
423
397
Apparel
Fabric
308
275
218
221
216
231
Made Ups
145
118
16
4
19
35
19
4
21
39
21
4
21
32
22
6
37
44
72
73
84
94
67
82
2004-05
2005-06
2010-11
2011-12
2012-13
2013-14
85
Fibre
19
6
37
51
25
5
42
48
Others
Yarn
Total
However, the Sub-Saharan African countries, despite having preferential market access to
major markets of US (under African Growth Opportunity Act -AGOA) and EU (under Everything
But Arms) have not been able to increase their trade share. An analysis of US imports of
Apparel under AGOA indicates that the exports rose since AGOA's inception late in 2000 till
2004 but thereafter failed to maintain the growth.
Figure 36: US Imports of Apparel under AGOA (In US$ Million)
1,300
1,146
1,010
1,027
986
860
723
855
704
726
813
904
264
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
31
There are several reasons behind this anomaly ranging from lack of export infrastructure to
political instability to absence of integrated capacities.
Another FTA on the horizon - Trans Pacific Partnership (TPP) agreement, where United States is
negotiating with 11 other countries throughout the Asia-Pacific region (Australia, Brunei
Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and
Vietnam). The inclusion of a significant apparel producer, Vietnam in this free trade agreement
will provide it with great advantage in markets of Canada, Australia and Japan.
32
5. Way Ahead
From an overall perspective Indian textile and apparel sector is in a position of good advantage. To
buyers looking for alternate, large supply bases India offers a credible alternate. Indias economic
growth is also expected to be higher for next few years which will result in higher demand for textile
and apparel products in domestic front too. However, our lack of focus on synthetic value chain,
manpower challenge and duty disadvantage in major markets compared to our competing nations
are main threats that can mar the anticipated growth at country level.
For manufacturers to take benefit of the domestic market growth story, the requirement will be to
be flexible enough to tap opportunities appearing in various market segments. On one hand the
manufacturers will need to cater large international brands and retailers, who will prefer sourcing
locally; while there will be fast growing Indian brands too. Need of brands and retailers to develop
lower cost business models will be key to enhance their presence in cities beyond Tier I and II. For
this, e-commerce will become more important. Manufacturers will have to focus on being lean and
enhance their productivity. As the brands and retailers will grow large within the country, they will
look for manufacturers with economies of scale who can cater to large orders timely. Strategic tieups between such manufacturers and buyers will happen which will enhance stability and efficiency
in the overall sector.
For exports, establishment of larger, integrated set-ups will be required. It will also be important for
Indian textile exporters to have business tie-ups in countries like Bangladesh, Vietnam, Myanmar,
etc. These countries will be attractive export destinations for Indian fibre manufacturers, spinners
and fabric manufacturers. In addition, they may prove good investment destinations for Indian
companies too, because of competitive manufacturing cost and preferential market access to US, EU
and Japan.
33
The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the
development of India, partnering industry, Government, and civil society, through advisory and
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.
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The Mantosh Sondhi Centre
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T: 91 11 45771000 / 24629994-7 | F: 91 11 24626149
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