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‘Make in India’ boost to the country’s denim segment

"The global market for denim is forecasted to reach $64.1 billion by 2020. The Indian denim industry has shown continual growth over the years and currently the country boasts of a denim manufacturing capacity of around 1.1 billion metres per annum. Its utilisation levels are pegged at 80-85 per cent. Despite the impressive statistics, the Indian denim manufacturing industry contributes 5 per cent to the global scenario, reflecting the overall performance of the textiles industry"

 

denim

Although India is the second largest textile manufacturer and also the second largest exporter globally, it contributes a minuscule 5 per cent towards India’s overall exports. According to a report by UN Comtrade in 2013, India’s textile exports were estimated at $40 billion whereas China’s were pegged at $274 billion. There is a huge gap in the current capacity and potential of the textile sector. A white paper by Suryalakshmi Cotton Mills says that the “Make in India” initiative of the Indian government is targeted at bridging this gap effectively while catapulting the country into becoming a textile export powerhouse.

India to emerge a strong denim exporter

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The global market for denim is forecasted to reach $64.1 billion by 2020. The Indian denim industry has shown continual growth over the years and currently the country boasts of a denim manufacturing capacity of around 1.1 billion metres per annum. Its utilisation levels are pegged at 80-85 per cent. Despite the impressive statistics, the Indian denim manufacturing industry contributes 5 per cent to the global scenario, reflecting the overall performance of the textiles industry. However, according to industry experts, denim is the only segment in the Indian textile industry that has the potential to grow manifold.

According to the Suryalakshmi report, an increasing number of global denim manufacturers are looking at India as an emerging denim export region owing to its quality standards, cost effectiveness and large pool of skilled work force. On the domestic front, the denim wear market is driven by increasing disposable incomes, westernisation of work culture and the ensuing rise in the popularity of denim jeans as business casual wear. With increase in globalisation, young India prefers denims as a part of their essential daily wear.

India offers numerous advantages to denim manufacturers. It is among the handful of countries that has a presence across the textile value-chain, from cotton to garments. In addition, it has a huge skilled workforce and offers quality products at competitive costs. To remain competitive in the globally, most textile companies have adopted global standards of safety and environment compliance. Additionally, the country’s demographics with an expanding purchasing power and modernising fashion sense further contribute to the sector’s growth. In fact, India has been ranked as a top destination for retail investments among 30 global emerging markets.

Challenges to denim manufacturing

Despite Indian denim manufacturing industry witnessing rapid growth in the last 4-5 years, technological expertise is still an issue. For the “Make in India” initiative to be successful for the textile sector, it is important that the government provides specific impetus for the growth of the indigenous denim industry. The technological integration of the manufacturing process coupled with capacity build-up can result in a rise in production of the fabric leading to enhanced domestic consumption and exports.

The Indian denim industry stands to benefit immensely from the ambitious “Make in India” initiative, the report points out. The vision of the programme has the potential to overhaul the segment’s perception and the country’s contribution in the world denim scenario. However, to turn this vision in to reality, India’s denim manufacturing segment needs to be equipped with facilitating mechanisms. Even more important is the effective implementation of these mechanisms. Once this is done, the strength of domestic Indian denim markets as well as its denim export capabilities will remain unparalleled.

The country offers multiple advantages as a denim manufacturing and outsourcing hub: India is among the few countries to have a presence across the denim manufacturing value chain – right from cotton production to denim garment manufacturing, It has abundant availability of skilled manpower and raw material, investments in best-in-class technological infrastructure, adoption of global technologies and manufacturing know-how, evolving fashion sense and product intelligence to compete in global markets, burgeoning middle-class with a rapidly expanding purchasing power and adherence to global standards of safety and environment compliance norms.

Initiatives such as the Make-in-India augur well for the development of this industry since they aim to promote innovation in the manufacturing sector and provide impetus to the sector’s growth by building best-in-class manufacturing infrastructure. However, for the denim sector to benefit from the outsourcing movement away from China, India’s policymakers need to formulate specific policies that cater to the segment’s demands.

www.suryalakshmi.com

 
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