US buyers turn to India for apparel as Bangladesh faces growing concerns

As concerns rise over the garment sector in Bangladesh, a recent report by the United States International Trade Commission (USITC) has highlighted India’s growing credibility as a preferred apparel sourcing destination. The report cites India’s political stability as a crucial factor for US-buyers, making the country a reliable choice for apparel production and delivery.

“Brands are more willing to source high-value or fashion items from India compared to less politically stable countries, as they are confident they will be able to produce and receive their products,” noted the USITC report. Industry insiders in India are optimistic, anticipating a surge in orders, though the domestic market still accounts for about 80 per cent of production.

 

While the report praises India's competitiveness, particularly in cotton-based garments, it also outlines key challenges for the industry. High labour costs, small production units, and costly logistics hinder scalability. Additionally, the limited capacity for manufacturing man-made fibre (MMF) garments restricts India's growth potential, with some brands perceiving the country as overly specialised in cotton products.

The USITC report also compares India with other leading garment exporters, including Bangladesh, Pakistan, Indonesia, and Cambodia, noting that these countries, along with Vietnam, have gained market share from China over the past decade. China’s share in US apparel imports has dropped significantly, from 37.7 per cent in 2013 to 21.3 per cent in 2023. During the same period, India’s share grew from 4 per cent to 5.8 per cent, with exports to the US reaching $4.6 billion last year. The US remains India’s largest market for apparel exports, though Vietnam has emerged as the biggest winner, raising its share from 10 per cent to 17.8 per cent.

One of India's key advantages, according to the report, lies in its vertical integration, particularly in the cotton garment sector. The availability of most inputs domestically enhances the country’s appeal as a reliable supplier with a comprehensive value chain.

Mithileshwar Thakur, Secretary General of the Apparel Export Promotion Council, welcomed the report’s recognition of India’s strengths beyond cost efficiency. “The Indian textile and apparel industry has long been a victim of negative perception. The USITC study has busted this myth by projecting the Indian apparel industry as one specialising in high value-added products, requiring high-skill levels and with the highest degree of reliability,” Thakur told The Times of India.

He also praised the report for evaluating factors such as supply chain reliability and product differentiation, instead of focusing solely on cost.

With one-third of India’s apparel exports heading to the US, the country has solidified its position as the fourth-largest supplier to the American market. However, addressing challenges related to labour costs, production capacity, and MMF manufacturing will be essential for sustaining and expanding this momentum.

India’s apparel sector is eager to leverage its strengths and increase its market share, positioning itself as a reliable and high-quality supplier in a rapidly shifting global trade landscape.