India has the potential to be one of the world’s largest exporters.
The value of festival goods and accessories sent by sea to the US in August 2022 from India was roughly three times what it was at the same time last year.
Even though China exports a sizable portion of Christmas décor items, a lot of first-time customers have begun approaching Indian exporters. Exports of Christmas decorations climbed by more than 54 per cent from the fiscal year 2020 levels in the year that ended in March, while exports of handicrafts increased by about 32 per cent over the same period.
Not just Christmas items are popular. Orders from the US and Europe have sharply increased for the third-largest economy in Asia, with the increase focused on labor-intensive, low-cost industries, including apparel, handicrafts, and non-electronic consumer goods.Taiwan, the EU, the US, and Japan are eager to give India another chance.
Buyers have diversified their supply sources in response to rising labor costs and disruptions from China’s strict Covid-zero regulation. India is now among the top five countries sending T-shirts and holiday decorations to the US.India has passed El Salvador to rank among the top five producers of cotton T-shirts for the US this year.
Several factors, including a ban on all cotton products from China’s Xinjiang area due to claims of maltreatment of its ethnic Uighur Muslim minority, are responsible for this.
China’s continuous decoupling from the global economy and the post-pandemic recoverypresent an opportunity for India to accelerate its investment in lengthy competition and prioritize capable- of-winning areas. India is predicted to have the greatest labor-force density in the world by 2030 and may contribute more than $500 billion yearly to the world economy.
Even though the US-China trade war began with supply chain diversification in 2018, India hadn’t made much progress at that time since Vietnam had monopolized the majority of the orders that were flowing away from China.
Companies land big orders
Order books for medium- and large-export companies increased by 30 per cent to 40 per cent in the previous fiscal year. This upswing will be more apparent in the current fiscal year, which ends in March 2023.
However non-labor costs remain a barrier to the expansion of low-value-added manufacturing. The main issues include the past issues with contract enforcements, tax transparency etc. These problems must be rectified in order for India to fully realize its potential as a manufacturing hub because they do provide a barrier to its manufacturing goals.