Indian Apparel Manufacturers Gain Global Attention Amid Bangladesh's Economic Struggles

ENA Economy 2025-01-06 15:22:55 New Delhi, Jan 6 (KNN) Major international apparel brands are increasingly turning their attention to Indian manufacturers, particularly in the Tirupur region, as Bangladesh grapples with significant economic challenges. According to Mithileshwar Thakur, Secretary General, Apparel Export Promotion Council (AEPC), companies including Primark, Tesco, Decathlon, and Walmart are expressing heightened interest in Indian manufacturing capabilities, with anticipated order fulfilment beginning in early 2025. Bangladesh's economic difficulties stem from a sharp decline in foreign exchange reserves, which dropped below USD 40 billion in July last year, marking a two-year low. This decline has impacted Bangladesh's ability to import essential materials such as cotton and fabric from India, traditionally a key source market. The country's reserves now cover only four to five months of imports, creating significant operational challenges for its manufacturing sector. Despite these challenges, Bangladesh maintains certain competitive advantages, including a 10-15 percent cost benefit over India due to its Least Developed Country (LDC) status, which provides duty-free access to markets in the European Union, United Kingdom, and Canada. However, several prominent brands are now reconsidering their heavy reliance on Bangladesh for sourcing, opening opportunities for alternative manufacturing destinations. The current situation presents a significant opportunity for India to attract investments that might otherwise flow to competing nations such as Vietnam, Cambodia, and Indonesia. Thakur emphasises that India's focus on infrastructure improvement, capacity expansion, and technology integration positions it favourably to capitalise on these redirected investments. The country is actively working with consulting firms to enhance productivity and efficiency in garment manufacturing operations. To fully capitalise on these opportunities, the AEPC is advocating for the implementation of PLI 2.0 (Production Linked Incentive) scheme for all garment types, regardless of fibre composition, with reduced investment thresholds. The council has also requested the Finance Ministry to eliminate customs duties on textile machinery to enhance sector competitiveness, particularly given the growing emphasis on ESG compliance in key overseas markets. The recent Bharat Tex 2024 event has further strengthened India's position in the global textile industry, attracting 3,000 buyers from 111 countries, including representatives from major brands such as Tommy Hilfiger, Calvin Klein, and H&M. This increased engagement with international buyers has contributed to the Indian apparel sector's double-digit growth this fiscal year, despite challenging global market conditions and geopolitical tensions. (KNN Bureau) 40529 https://knnindia.co.in/news/newsdetails/economy/indian-apparel-manufacturers-gain-global-attention-amid-bangladeshs-economic-struggles 2025-01-06 15:22:55 knnindia.co.in Indian Apparel Manufacturers Gain Global Attention Amid Bangladesh's Economic Struggles