Indian apparel exports to European markets and the UK declined by two or three per cent during the first four months of the fiscal. In addition to a general slowdown in EU’s import demand amid currency weakening, India’s position in the EU has been adversely affected by the preferred access to key competing nations such as Bangladesh and Vietnam, by way of free trade agreements.

While the trade war has opened up opportunities for Indian apparel exporters, there are doubts if they will be able to grab it. It would require companies to scale up their operations, maintain strict delivery schedules and meet stringent compliance requirements of the buyers in a short span of time.

Export incentives will play a crucial role in determining the ability of apparel exporters to garner a larger pie of the global apparel trade. While these incentives have proved partially useful, they have not helped Indian apparel manufacturers compete on price with their competitors. Some Indian apparel makers feel they can shift their existing manufacturing to Vietnam and Bangladesh to benefit from tariff arbitrage, labor laws, low wages, conducive business environment and, hence, better return on capital employed.