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Key Points

India's apparel export sector is positioned to benefit from shifting global trade dynamics as brands diversify sourcing away from China. The country's large-scale manufacturing base and competitive costs make it an attractive alternative to traditional export hubs. However, higher import tariffs in key markets and lack of preferential trade agreements are limiting growth potential. If tariff barriers are addressed through upcoming FTAs, India could capture a much larger share of the global apparel market.

Key Points: India Apparel Exporters Gain from China Plus One Trade Shift

  • Global brands diversifying from China boost India's apparel export prospects
  • Higher US tariffs and lack of EU trade deals hurt India's competitiveness
  • Bangladesh and Vietnam enjoy zero-duty EU access under preferential agreements
  • India's PLI schemes and improved logistics strengthen manufacturing capabilities
3 min read

Changing trade dynamics positive for Indian Apparel exporters, but high tariffs disrupting segment

Indian apparel exporters benefit from global trade diversification but face tariff disadvantages against Bangladesh and Vietnam. Industry report highlights growth potential with FTAs.

"The evolving global trade landscape, particularly the China + 1 strategy adopted by global brands, has created new opportunities for Indian garment manufacturers - Antique Research Report"

New Delhi October 7

India's apparel export sector is poised to benefit from shifting global trade dynamics, according to a recent industry report by Antique research. With multinational retailers diversifying their sourcing destinations away from China, India has emerged as a key beneficiary due to its large-scale manufacturing base, competitive labour costs, and expanding product capabilities.

The report points out that countries like Bangladesh and Vietnam have traditionally dominated global apparel exports, but India is fast catching up as buyers seek to reduce dependence on single-country sourcing. Recent trade tensions, geopolitical realignments, and increased focus on sustainability are reshaping global supply chains are creating opportunities for Indian manufacturers.

"The evolving global trade landscape, particularly the China + 1 strategy adopted by global brands, has created new opportunities for Indian garment manufacturers," the report said. This structural shift, coupled with India's improving logistics, government production-linked incentives (PLI), and enhanced compliance standards, is expected to strengthen export competitiveness over the next few years.

The report adds that the US and EU are India's two largest apparel markets, and they are showing renewed interest in Indian products, especially in segments like cotton garments, knitwear, and value-added fashion apparel.

But while the outlook remains promising, the report cautions that higher import tariffs by the US and a lack of trade agreements with key markets are hampering India's export growth potential. Competitor nations such as Bangladesh and Vietnam enjoy preferential access to markets like the European Union through duty-free or concessional tariff arrangements, a benefit Indian exporters currently lack.

India's apparel exports have the potential to grow exponentially, but tariff disadvantages are eroding price competitiveness, says the report. For example, Indian apparel shipments to the EU face an average tariff of around 9-12 per cent, compared to zero duty for Bangladesh under the EU's Everything But Arms (EBA) initiative.

"We believe the higher tariffs has made exports unviable (esp. RMG and home textiles), impacting volumes of textile exporters. There's optimism about the 25% tariff being removed by FY-end," noted the report

The report adds that, while India's export capacity and quality have improved significantly, apparel producers continue to grapple with compliance costs, fluctuating cotton prices, and a fragmented manufacturing structure. The free trade agreement (FTA) with the UK and likely by EU are viewed as critical steps toward levelling the playing field.

The report noted that if tariff barriers are addressed and supply-chain reforms continue, India could capture a significantly larger share of the USD 500-billion global apparel export market over the next decade.

- ANI

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Reader Comments

R
Rohit P
The tariff disadvantage is really hurting us. How can we compete with Bangladesh when they get zero duty access? Our government needs to negotiate better trade deals ASAP. Otherwise all this potential will go waste.
A
Ananya R
My cousin works in a Tiruppur export unit and they've been getting more orders from US brands lately. But the 25% US tariff is killing their margins. Hope the government resolves this soon! 🙏
D
David E
As someone working in international trade, I must say India's compliance standards and quality have improved remarkably. But the fragmented manufacturing structure remains a challenge. Consolidation would help compete better globally.
S
Shreya B
Great to see our textile industry getting global recognition! We have the skills, workforce, and raw materials. Just need level playing field in international markets. Make in India should mean export from India too! 💪
K
Karthik V
While I appreciate the positive outlook, we shouldn't ignore domestic challenges. Cotton price fluctuations and compliance costs are real issues for small manufacturers. Government support at ground level is equally important.

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