"Tirupur is all set to become the next China, pushing India ahead as global leader in apparel. With cost of production going up radically in China, it is phasing out textile and it seems the opportunity is for India to grab. Tirupur, often termed as the knitwear capital of India, is playing a crucial role in placing India in the top slot of global rankings."

Tirupur is all set to become the next China, pushing India ahead as global leader in apparel. With cost of production going up radically in China, it is phasing out textile and it seems the opportunity is for India to grab. Tirupur, often termed as the knitwear capital of India, is playing a crucial role in placing India in the top slot of global rankings.

India’s $17 billion exports of apparel were about half as much as Bangladesh’s last year and its 3.7 per cent global market share lagged behind Vietnam’s 5.1 per cent. Closing the gap is crucial: Apparel is a labor-intensive industry, which has historically helped developing economies transition out of agriculture. The Indian economy needs to generate 80 million new jobs by 2025 to keep up with its fast growing young population.

A dream fuelled by the Prime Minister’s vision

The general sentiments, is that Prime Minister Narendra Modi led government’s biggest failure so far has been inability to boost employment, which is now a major agenda for Opposition. To boost the apparel and textiles recently a nearly $1 billion package including subsidies for employment generation, tax refunds and relaxation of overtime rules with a goal to create 10 million jobs and boost exports by $30 billion in the next three years were announced.

Numerous challenges bog down industry

In its journey to the top, India has to tackle a few key challenges including worker productivity, which is almost three times lower than in China. One of the major reason for this is the unorganized nature of Indian apparel manufacturing which is dominated by unregistered units, limiting the use of modern production technologies and the capacity to take on large orders. It is becoming more challenging as foreign garment and textile producers prefer to embrace end to end automation. Experts say, India needs to start climbing the ladder fast to take advantage of its young population.

As per market reports about 78 per cent of Indian companies employ less than 50 workers, compared with 15 per cent in China and a lot of them remain below the threshold of government taxes and regulation, known by economists as the "informal" economy. The recently World Bank report shows that Bangladesh had 15 times more garment workers formally employed than in the informal sector, while India has about seven times more informal garment workers than formal.

Moreover focus on cotton has put a limitation on India’s apparel industry to access to the growing high fashion winter wear market. In neighboring Bangladesh, garments account for 80 per cent of overseas shipments, the monthly minimum wage is about 30 per cent lower than India’s $105, and exporters don’t pay duties to the European Union. It becomes difficult for Indian companies to compete, despite India’s large cotton production. The industry is surviving on government incentives that help businesses stay profitable and continue hiring.

Associations campaign for Tirupur like clusters

Now, Tiruppur exporters have also come together to lower costs by educating companies on effective low cost production management techniques and training staff to increase output. With government’s help the group hopes to take its action plan to the capital, 1,500 miles north. With an eye at top rankings India’s apparel manufacturers association is working together to reduce costs of operation, increase output and campaigning for creating more clusters like Tirupur.