UK FTA: Textile sector needs to localise, scale up to win big
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Industry experts believe this is crucial for them to be globally competitive and realise the full potential of the deal.
Indian apparel exports are expected to have 9% cost advantage, with the tariff cut making it competitive with Bangladesh, Vietnam and China. Indian RMG export is expected to double to $3.5 billion in the near future, according to Dr A Sakthivel, vice chairman of apparel export promotion council (AEPC), a trade body.
"Out of this, Knitwear exports alone are expected to increase from $ 0.8 billion to nearly $ 2 billion, accounting for around 70% of total RMG exports to the UK," he said.
The UK dept of business and trade, in its sectoral impact assessment report, estimated Indian textile, apparel and leather imports to increase 85%.
Indian companies have been losing market share to Bangladesh due to tariff differential. Despite fluctuations, India ranks fourth among largest garment import sources in the UK Sakthivel said the deal offers an opportunity to gain market share from competing nations and to diversify its product portfolio.
The Indian garment exports predominantly being cotton products like T-shirts, summer wear and baby garments. Exporters TOI spoke to stressed the need to expand into the fast-growing athleisure and winter garment categories. They called for increasing capacity in MMF supply chain from yarn and dyeing units to processing units which requires increased mechanisation. "In addition to the PLI for MMF and technical textiles, which caters to larger manufacturers, the union govt needs to incentivise small and medium scale manufacturers to invest in capital equipment (with the ticket size of Rs 10 crore to Rs 30 crore) and help them building larger facilities to achieve economies of scale," says Alexander Neroth, director of NC John Garments, an exporter from Tiruppur.
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These are crucial for competing with Asian majors in quality and price, he adds. Deloitte in a report said it would be important to evaluate strategic shifts in the supply chain to reap the full benefits of the CETA and mitigate risks. Currently India relies on imports from Taiwan and China for MMF.
Indian footwear market to get more competitive, say makers
Leather products and synthetic footwear makers say the deal will make Indian exports competitive. J Rafiq Ahmed, chairman of Kothari Industrial Corporation, who is working with global footwear brands said the deal will pave the way for increased sourcing of synthetic footwear for the UK market, as part of global shifts. He added that Indian makers need to focus on sustainability and aligning with global norms. GLC Vijayan, managing director of Good Leather, exporter of formal and children's leather shoes said the products imposed 16% duty are now duty free and expect a boost in the order this season.
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