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FDI in retail to bring opportunity for Indian T&C leaders
05
Oct '12
Expansion of multi brand retailing expected in the wake of the recent decision of government to allow FDI in the sector will create unprecedented opportunities for the textiles and clothing industry of India according to a paper presented by Mr. Thomas Varghese of Aditya Birla Group in the Indian Textile Summit organised by Confederation of Indian Textile Industry (CITI) on 27th September 2012 in Mumbai. 

The well attended summit discussed some of the critical issues and opportunities emerging in the global as well as Indian textile sector. 

Welcoming the speakers and participants to the Summit, Mr. Prem Malik, Deputy Chairman, CITI stressed the need for the clothing industry of the country to improve production efficiency to meet competition from low cost Asian competitors. He felt that the country had the potential to raise its share in global apparel trade from the current 3.1 to 6-7%. He also felt that some of the measures announced by government recently like liberalizing retail investment would help the textiles sector to improve its performance.
 
Speaking at the summit, Mr. Thomas Varghese said that textile & clothing (T&C) products would be the core component of most of the multi brand outlets because of its high margin and the ability to create differentiation through private labels. He felt that this sector would be one of the major beneficiaries of the liberal retail trade scenario. 
 
FDI in Retail would increase competition but it would also create opportunities for T&C players to garner scale and become world class players. Currently clothing occupies 36% of the overall retail segment and this would increase substantially after more organised retailers enter the market. He said that the demand for readymade and western outfit was growing at 40-45% annually, but the key for success in the emerging competitive environment would be to deliver affordable and accessible fashion to the value conscious customers.
 
Mr. R. Raghuttama Rao, MD, ICRA Management and Consultancy Services (IMaCs), in his paper on global economic situation observed that global recession had a negative impact on Indian textile industry but this would be a short term problem. Though the EU members were still in contraction mode and fighting the financial crisis, the recovery of consumption in US and the possibilities of the market emerging out of slowdown are expected to provide the much needed relief to Indian textile exports in the medium term. Moreover, the slowdown of Chinese economy and Vietnam, one of the lead players in the textile sector, would provide some competitive relief to India as the global demand starts to grow along with recovery. 
 
 


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