Rapid increase in India’s apparel and textile exports

India’s integration into the global apparel market has been quite a different experience than many of its competitors as it did not depend so centrally on prior participation in regional trade agreements, on major FDI or on deep integration into the world’s major clothing value chains. According to a study by the Indian Council for Research on International Economic Relations (ICRIER), India’s rather quick emergence as a successful textile and garment exporter after years of inward orientation had more to do with changes in domestic policy that took place in 1980s and 1990s.
As per the study, India’s apparel and textile exports have risen rapidly in the past eighteen years. From barely $ 30 million in 1970, India’s apparel exports rose over 270 times in 34 years to $ 8.3 billion in 2004. The study points out that this growth was based on the domestic presence of a vast fibre and textile base, mainly cotton, and that this growth was achieved with very little foreign direct investment (FDI). Between 1991-2004 the Indian textile and apparel industry had received only $351 million in cumulative FDI, or 1% of the total FDI inflows during that period. In contrast, foreign-invested firms account for a third of all of China’s apparel exports (UNCTAD 2005); Bangladesh’s apparel industry received over 27% of the country’s total FDI. Similarly, Sri Lanka has an estimated 1000 garment export firms from 55 countries. India’s textile and apparel exports are dominated by domestic firms like Arvind Mills, Indian Rayon & Industries and Raymond, said the study.
Though, the biggest names in apparel like Gap, Banana Republic, Ann Taylor, Nike, Reebok, Liz Clairborne etc are sourcing directly from India, it is striking that till the late 1990s and early 2000s few global players had significant direct presence in India.
Also, India’s recent export growth has occurred despite its absence from every major regional free trade agreement (RTA).
Courtesy: http://www.financialexpress.com