Global sourcing patterns suggest that bulk buyers, i.e. ZARAs, H&Ms, Li& Fungs, PVHs and Walmarts of the world are slowly shifting their sourcing to cost competitive manufacturing locations including Bangladesh, Vietnam, Cambodia and Myanmar while gradually reducing sourcing from China. The adaptability of manufacturers, low manufacturing costs and tariff benefits in these countries have been the prime reasons for their recent success. However, what these trends fail to reveal is the level of control these brands have over the way their products are being manufactured in these new destinations. In fact, the garment manufacturing companies in these countries need to be commended for creating infrastructure suitable enough to comply with the needs of international buyers.
The increasing apparel exports from countries such as Bangladesh, Myanmar indicate that these countries have garnered significant interest from buyers and at the same time, they are moving towards building suitable infrastructure. These trends pose a question for Indian garment manufacturing companies as India’s garment exports in the past few years has been stagnant.
The main question is that if the brands have increased their sourcing volumes, why has India not received a significant share of the pie? The Indian garment manufacturing industry holds the scales of production in only a few pockets, however, the overall industry currently lacks the infrastructure to attract global buyers. The way ahead for Indian garment manufacturers is to develop export compliant factories that can cater to global buyers and still manage to be cost-competitive. With India having its cost factors less than China but more than Bangladesh, this might appear to be difficult to compete against Bangladesh, however, this can easily be overcome provided Indian garment companies build garment factories that are both compliant and competitive
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