Indian Garment Industry: Scope And Success

India’s textile sector is one of the oldest industries in the Indian economy, dating back several centuries. Being one of the largest contributors to India’s exports, the textiles sector is labour intensive and has two broad segments. First is the unorganised sector consisting of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools. The second is the organised sector, which consists of spinning apparel and garments, and applies modern machinery and techniques, resulting in economies of scale.

However, the majority of India’s garment industry is in the unorganised sector. Very few garment companies operate on a large scale because of the lack of access to technology, finance and dexterity. In fact, over the past decades, garment manufacturers have confronted major constraints that hindered them into building their business into an organised business venture.

Ironically, the availability of skilled and low-cost labour is actually a comparative advantage for India, as it is very location-specific. Large garment manufacturers have the advantage of higher productivity because of advanced and automatic technology. Some competitive advantages of garment manufacturers are firm-specific, depending on their size, resources of their managements and their commitment, as well as access to knowledge, expertise and resources for managing the global value chain.

Upgrading the value chain is imperative if the garment industry has to remain competitive in the long term. In order to be a partner in the global value chain, we need a highly structured network, in which big international buyers can provide knowledge and expertise across a variety of products. A good number of global players collaborate with big firms that have adequate resources and commitment capability, which is necessary to fulfil predefined requirements.

For the Indian garment industry, the path forward requires moving up in the value chain, by upgrading the product and producing higher value products in terms of design, new fabrics and raw materials. There is also a need for functional upgrading, in terms of comfort and related areas. And there is a need for better and direct marketing, brand building and immediate customer service. It has been observed that although small firms in India have shown adequate strength in upgrading their products, their scores are poor compared to bigger firms in terms of process and functional updates.

With disposable income emerging in India, garment manufacturing has a firm future ahead. The manufacturers can live up to the expectation of buyers by giving them value for money when their products and processes are upgraded. Integration with the global value chains is an utmost requisite. Most of these goals can be met by setting up bigger firms, along with government incentives in infrastructure.

Rajiv Garg first conceived the idea of bringing the Entrepreneurs’ Organization to Punjab in December 2013, after which he formed the chapter with 16 founding members in January 2014. Currently, the Punjab Chapter has 42 members across Amritsar, Jalandhar, Phagwara, Ludhiana and Chandigarh.