e of fragmentation in the industry. The easy availability of cotton is one of the advantages for the Indian apparel sector.
b) Low labour costs:
India has one of the lowest labour rates in the world, which adds to the higher cost competitiveness of the Indian companies. Labour cost in India is as low as 75 cents per hour as compared to 100 cents in china and 120 cents in case of Thailand and 300 cents in case of Turkey.(Source : office of textile commisoner)
Since textile industry is price sensitive and labour sensitive, the cost effectiveness directly translates into competitiveness.
c) High quality designing
World over, Indian designers are respected for their high skills in designing and artistry. The growing prominence of Indian designs in the world fashion circuit is evident by the recent successful fashion shows of Indian designers in EU and USA. Garments designed by the Indian designers are increasingly getting acceptance across the world. Large apparel companies are increasingly looking for outsourcing high end designer apparels from Indian fashion houses.
d) Strength across the value chain
Unlike other nations, India has end to end capabilities for spinning, weaving, knitting, processing and garment manufacturing. The presence across the value chain provides cost efficiencies to Indian companies on account of synergies of operation. Further it enables Indian companies to source their material locally, thereby reducing the lead time and investment in inventories.
Weaknesses
Key Impediments for the Indian Textile Industry:
Fragmented Industry
The Indian RMG industry is highly fragmented. There are more than 7,500 exporters registered with the Apparel Export Promotion Council (APEC). The turnover of more than 50% companies is less than US$ 0.1 million. Further, there are around 100,000 apparel manufacturers present in the country both in the organized as well as in the unorganized sector.
Fragmented industry which leads to lower ability to expand and emerge as "world class" players.
In fabric, large section of the industry is in the power loom and handloom sectors. Global buyers prefer to source their entire requirements from two to three vendors, and Indian garmenters find it difficult to fulfill the capacity requirements.
Effect of Historical Government Policies
Historical regulations though relaxed continue to be an impediment to global competitiveness. The industry continues to be affected by several historical regulations continue eg absence of a viable exit option for industry players.
These regulations result in a complex industry structure, which is currently an impediment. On the other hand, in some cases the industry too has not taken full advantage of government initiatives eg TUF.
Lower Productivity and Cost Competitiveness
Lower cost competitiveness has hampered ability to compete with lower cost global players. This is due to the lower productivity of labour force in India as compared to other countries like china, Sri Lanka etc. Moreover; the Indian industry lacks adequate economies of scale and is therefore unable to compete with china and other countries.
Global players usually prefer outsourcing in large volume to take advantage of economies of scale; however Indian manufacturers find it difficult to fulfill large orde
