New Delhi: With China losing sheen as the global leader in the apparel market, India needs to take specific steps like lowering input duties and extending market access to fill that space, otherwise be cornered by southeast Asian countries, the World Bank has said.
“Apparel manufacturing not only has a huge potential for creating jobs, particularly for the poor, but also has a unique ability to attract female workers. Employed women are more likely to create positive social impacts as they tend to spend their income on the health and education of children,” said Onno Ruhl, World Bank's country director for India.
“Rising costs of apparel manufacturing in China provides a window of opportunity for India to focus on apparel in productively employing its huge working-age population,” he added.
Ruhl was speaking at the launch of the new study by the World Bank, “Stitches to Riches? Apparel Employment, Trade and Economic Development”.
As wages increase, China, the largest apparel manufacturer for the last 10 years, is expected to slowly relinquish its lead position in the global apparel market, opening the door to other competitors, the study said.
“This could be a huge opportunity for India and other South Asian countries. Even a 10 percent increase in Chinese apparel prices could create at least 1.2 million new jobs in the Indian apparel industry,” the report estimated.
Women are expected to benefit the most as their share in the total apparel employment is much higher than their share in other industries. A one percent increase in expected wages in the textiles and apparel industry could raise the probability of women entering the labour force by 18.9 percent, the report said.
Ruhl also said India has a stable apparel industry. “But that is not enough. We want India to grow faster.”
He pointed out two things where India needs to concentrate to go up the ladder in apparel industry.
“Connecting to global value chain is very important. For example, foreign direct investment and free trade route can be useful ways of doing that. Secondly, the world is demanding more man-made fibres. India also need to give more importance to that. Focusing only on cotton means India will be missing on market,” he added.
The report recommended removing trade restrictions to allow easy access to man-made fibers as inputs; increasing efficiency along the value chain such as integration between textile and apparel; and improving social and environmental compliance by introducing better human resource practices.
It suggested policy measures like increase product diversity, improve productivity, improve market diversity and shorten lead times as some of the steps that would help increase apparel exports from India.
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