Chinese apparel investors optimistic on India & Sri Lanka

30 May '13

2 min read

The Chinese textile and garment industry is currently passing through a transition phase underscored by two main trends – transformation and upgradation of the industry, and relocation of manufacturing to other countries, especially countries in South and Southeast Asia.

In order to help enterprises that are willing to opt for the second strategy, China Textile Import and Export Chamber of Commerce organized a trip for representatives of some textile enterprises to India, Sri Lanka and other countries, last month.

The aim of the trip was to make in-depth research on the development of textile and garment industries in those countries as well as to gauze trade and investment environment in those countries.

The visit of the Chinese delegation included a study on Brandix India Apparel City (BIAC), located in Visakhapatnam district of the southern Indian state of Andhra Pradesh. The team found that BIAC has adequate supply of cotton as Andhra Pradesh is the third largest cotton producing state in India. The cotton supply is able to feed the vertically integrated “fibre to store” system at the apparel city. From the view of basic salary, the average monthly salary of workers at the BIAC was roughly equivalent to only 700 yuan.

The Chinese team found that labour costs were slightly higher in Sri Lanka, where the monthly salary of garment workers was equivalent to 800 yuan.

The team concluded that raw material advantage combined with lower labour costs make India and Sri Lanka attractive destinations for Chinese investors willing to invest in the textile and garment industries in these countries.

In terms of production efficiency, the South Asian countries may not be at par with China, but from a comprehensive view, the textile and garment enterprises of these countries are more competitive than the Chinese for low-end products. So, it makes sense for Chinese low-end textile and apparel enterprises to shift to these countries, the delegation concluded.

Fibre2fashion News Desk - China

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