Garment manufacturers in India are looking at Ethiopia to set up manufacturing firms. They have lined up investments worth over Rs 600 crores in investments in that country. Companies setting up shop in the African nation include Raymond, Arvind, Best Corporation and JJ Mills.

Ethiopia gives duty-free access to the European and US markets. Labor cost in Ethiopia is half that in India and there is no requirement on investing in land and buildings. Power cost is also below Rs 2 compared with Rs 7 in India. Duty-free to the US and Europe is the key attraction, which India doesn’t offer. This is the reason Indian players are not able to compete with Bangladesh, Sri Lanka and other countries.

Ethiopia is developing industry estates and delivering them on a ready-to-use basis. Indian companies just need to move with their machines. Meanwhile Arvind is setting up a garment factory and is planning to invest around Rs 100 crores. Best Corporation, which will start production in the next six months, is setting up a 1000-machine factory at a cost of Rs 30 crores to meet the demands of the US market. Raymond is investing about Rs 130 crores in a plant to manufacture two million jackets. The company has expanded its footprint through the acquisition of a garment unit in southern Ethiopia.