The Global Trade Research Initiative (GTRI) emphasized the imperative for the Indian apparel industry to shift its focus towards synthetic fabrics to bolster exports, according to a report released on Tuesday. GTRI highlighted that the prevalent trend in developed countries is the purchase of clothing crafted from mixed synthetics, an area where the Indian apparel industry currently lags, contributing to a diminishing share in global exports.
Describing the situation, the report underscored that India’s apparel industry is akin to a horse running with one leg tied due to its weakness in synthetic fabrics. The consequences include diminished exports, subdued wages, and limited investments within the sector. The report further acknowledged the ascendancy of synthetics over cotton, constituting the preferred choice in the fashion industry.
Pointing out a crucial disparity, the report revealed that while 70% of clothing purchased by developed countries consists of mixed synthetics, their representation in Indian exports is less than 40%, a pivotal factor behind the country’s subdued garment exports. It emphasized that contemporary formal, sports, and fashion wear predominantly employs synthetic fabrics due to their durability, color retention, and versatility in blending with other materials such as wool, cotton, or rubber.
The report expounded on the global dynamics, highlighting the dominance of cotton in spring and summer sales seasons, whereas synthetics and blends command autumn and winter seasons. The consequence for Indian units is a six-month operational cycle, resulting in shutdowns or low capacity utilization during the remaining six months due to a lack of orders for synthetics and winter wear.
Additionally, the report addressed the economic challenges faced by factories operating only six months a year, incurring full-year fixed costs. Entry into synthetics was proposed as a solution to enable year-round production, leading to manifold increases in wages. The report stressed that India’s failure to capture a substantial market segment by exporting less than 40% synthetic textiles hampers its integration into fast-moving global textile value chains.
Furthermore, the report highlighted weaknesses in India’s textile value chain, particularly in underdeveloped weaving and processing sectors characterized by small, informal units lacking expertise, scale, and technology. Challenges such as power outages and underutilization were identified, contributing to elevated weaving costs comparable to those in the EU or US. The capacity gap and processing challenges in fabric production were underscored, leading to India exporting yarn but importing fabric.
To address these issues, the report proposed setting up ten large-scale weaving and processing units as an annual goal. In 2023, India’s garment exports amounted to USD 14.5 billion, significantly trailing behind global counterparts. The report recommended the adoption of Fast Fashion Industry Compliance by domestic firms and advocated for strengthening contract enforcement and easing rigid labor laws to propel industry growth.
It concluded by asserting that India must prioritize enhancing synthetic apparel production, strengthening weaving and processing capabilities, becoming fast fashion compliant, negotiating non-tariff barriers, liberalizing labor laws, and improving contract enforcement to regain its textile prominence.