India Challenges China, Becomes World’s Second Largest Textiles Exporter

India is rising as a regional power, taking up a new position as the world’s second largest textiles exporter with a global share of 5.2%. India’s Textiles Minister has projected the value of exports to reach $50 billion USD in the current fiscal year. The growth is being largely driven by its apparel manufacturing, for which exports grew almost 25% in May. Apparel export growth is being driven by non-traditional markets such as Latin America, Southern Africa, and East and West Asia.

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Bangladesh Inspection Groups Raise Tensions

North American and European inspection groups ‘The Alliance’ and ‘The Accord’ are together auditing 2,100 of Bangladesh’s 5,600 garment factories, which employ some 4 million workers and account for 80% of the country’s exports. AI data for 2014 shows that for factories that underwent ethical audits, 27% are at serious risk and 59% are not compliant.

 

The groups are involved in a debate with stakeholders over the process by which they shut non-compliant factories. It’s feared that the disruptions may contribute to slowing export growth, with buyers turning to sources they deem more stable, such as China, India and Vietnam. While the groups exist to protect workers, there are practical issues at stake – the protection of jobs and provision of worker compensation during extended shutdowns for repairs, which are often ordered without notice. So far 14 factories have been shut down and 5 have had their operations limited.

 

Factory closures should only be undertaken if employees are at immediate risk. AI’s experience has shown that many of the faults found in the course of a properly executed audit program can be fixed with corrective action, training and education, contributing to the long term economic value of the factory and country.

 

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