Apparel exports from India are gradually losing out to other smaller nations and the country is becoming more of a supplier of intermediate items to these garment exporting countries, according to industry analysts.
The EU and the US account for over 80 percent of India's textile and apparel exports. But, in these markets, India' main growth is coming from export of textile items including intermediate products like yarn, fabrics and made-ups, according to analysts.
As China began losing its hold over the EU and the US markets in clothing item exports, India was considered to be in the best position to capitalize on the situation. However, countries like Bangladesh, Indonesia and Vietnam have outdone India in gaining a share in western markets, experts said.
On the basis of export figures for the initial months of 2012, experts said India has conceded more ground to Indonesia and Vietnam in the US market for apparels, while Bangladesh is increasing its market share in the EU owing to the duty-free access enjoyed by it due to its Least Developed Country (LDC) status.
India's garment exports to the US are growing at a slower pace compared to its other Asian competitors. While Vietnam has already surpassed India by exporting apparels worth US$ 5.9 billion to the US, Bangladesh and Indonesia are quickly catching up with India.
Similarly, in the EU market, India has clocked lower growth than its Asian rivals, particularly Bangladesh and Pakistan, which enjoy concessional duty access to the EU.
According to analysts, India's good performance in home textile exports is marred by a decline in its competitiveness in garments sector, which is not a good sign as clothing items yield higher profit margins for exporters than home textile items.
Fibre2fashion News Desk - India
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