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'India offers relocation chances for HK garment cos'

09 Apr '16
5 min read

and apparel suppliers to both the US and EU markets and is expected to continue doing well in its export markets. According to a 2015 US survey study, US companies acquired their apparel products from more than 40 countries/territories during the year. Among the top 10 sourcing destinations, eight were in Asia. China was the undisputed leader in terms of garment sourcing, with 100 per cent of the respondents buying from this world factory of readymade apparel, followed by 80 per cent sourcing from Vietnam, 67 per cent from India and 53 per cent from Indonesia. Notably, onshore sourcing was important too, with 50 per cent of the respondents still getting their apparel from US suppliers.

Further, based on scores compiled from the weighted rankings of how strongly the survey respondents expect to increase or decrease sourcing from a given place, it was revealed that there was stronger interest over the next two years in sourcing from Asia, particularly Vietnam, India, Bangladesh and Indonesia. In comparison, China scored the lowest among 27 destinations in terms of the tendency of US apparel companies to alter sourcing over the next two years.

Not surprisingly, the strong trend towards Vietnam has arisen as a result of many factors, including its proximity to China as a nearby destination for Chinese manufacturing relocation, and anticipation of duty preferences due to its participation in the Trans-Pacific Partnership (TPP), especially to the US market.

India's textiles and apparel sector is one of the oldest industries in the country. In a 2015 industry report, the market size of India's textiles and apparel industry was valued at about US$108 billion and expected to reach $223 billion by 2021.

The labour-intensive sector is estimated to contribute about 5 per cent to India's GDP and 14 per cent of industrial production, creating direct and indirect employment for, respectively, some 45 and 60 million people, making it the country's second largest employer after agriculture.

The HKTDC Research noted that the Modi government is expected to issue the much-awaited National Textile Policy to present a future roadmap for the textiles and apparel industry, probably before the end of April 2016. It is expected to formulate schemes for the entire value chain and address concerns about skilled workforce and transportation cost. In particular, the policy aims to create 35 million new jobs by attracting foreign investment, spurring textiles and apparel exports to some $185 billion by FY2024-25. (SH)

Fibre2Fashion News Desk – India

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