A prominent think-tank, Global Trade Research Initiative (GTRI) has proposed a series of measures to revitalise India's garment export sector in response to the country's declining market share in global garment trade and lagging performance compared to competitors.
A few of the key recommendations from GTRI include the temporary suspension of quality control orders (QCO) on polyester and viscose staple fiber, expansion and relaxation of criteria in the textile production linked incentive (PLI) scheme, an overhaul of Directorate of Foreign Trade (DGFT) and Customs procedures, and addressing monopolistic practices of domestic suppliers.
The think tank identifies complex procedures, import restrictions, and domestic vested interests as major obstacles to export growth. Difficulty in sourcing quality raw fabric, particularly synthetic fabricis highlighted as a significant challenge for exporters.
In 2023, India's garment exports lagged significantly behind competitors such as China, Vietnam, and Bangladesh at $14.5 billion. According to Ajay Shrivastava, Co-founder, GTRI, this demonstrated the significant gap between India and its competitors.
The report shows, as against a growth of 69.3 per cent by Bangladesh and 81.6 per cent by Vietnam, India’s garment exports grew by only 4.6 per cent from 2013 to 2023. Consequently, India's global market share has been on a decline since 2015, with knitted apparel dropping from 3.85 percent to 3.10 percent and non-knitted apparel from 4.6 percent to 3.7 percent.
GTRI argues, quality control orders have undermined the competitiveness of India's man-made fiber (MMF) supply chain by limiting access to affordable and specialised raw materials. The report also criticises the Bureau of Indian Standards for delays in registering foreign suppliers, forcing exporters to rely on domestic monopolies at higher prices. Unlike their counterparts in Bangladesh and Vietnam, Indian exporters face daily struggles in accessing quality imported fabrics.
Further complicating the situation are high import duties and complex DGFT that require meticulous accounting for imported fabrics. The report also notes a concerning trend where garment imports to India rose by 47.9 percent between 2018 and 2023, while textile imports increased by 20.86 percent during the same period.
