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How India can catch up with China in apparel trade?

India is nowhere near China in the apparel trade. China is the world’s apparel superpower and controls 39 per cent of the global apparel trade. India, in contrast, exports one-tenth that of China and contributes 3.7 per cent to global apparel trade.

To enhance its share in the global apparel trade India needs to do some things. One is to build cost-effective large-scale fabric mills. A large fabric mill brings in efficiencies, lowers costs and improves quality. As quality and cost-effective fabric capacity increases, the demand for India’s fabric locally and internationally will go up, spurring further downstream investment. India practically has no good quality synthetic fabric mills. The world, on the other hand, is moving away from cotton and towards synthetics.

India’s manufacturing efficiencies are low compared to those of Chinese factories. Concepts such as lean manufacturing are not as prevalent in the garment-making world as they are in automotive manufacturing. Investment in people and systems is rare, and at the heart of this is the entrepreneur’s fear of adding and investing in labor without having the flexibility to downsize as required. This fear is driven by a system of archaic labor laws and unhealthy labor-politician nexuses that thrive in many manufacturing clusters. Consequently, large Indian garment factories employ 3,000 to 4,000 people, while Chinese factories employ over 10,000 at one place. So labor reforms are central to building higher quality garment factories.

 
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