China losing competitiveness, boon for India – Experts

With the Chinese textile and apparel sector grappling with high inflation and ascending labour costs, enquiries with the Indian textile and clothing export sector have augmented by 10-15 percent.

Rise in enquiries have raised hopes in the Indian textile and garment export fraternity of snatching a share of Chinese exports, which now account for around 27 percent of global shipments.

Mr DK Nair, Secretary General - Confederation of Indian Textile Industry (CITI), is of the opinion that, it’s not inflation alone. China has several problems including inflation. Their competitiveness in fabrics is coming down so import of fabrics from China to India will fall and export of garments from India will increase.

Mr SN Rangaiah, General Manager - Gokaldas Exports, one of the biggest clothing exporters from India says, “This is definitely a boon to Indian industry as we are getting lot of encouraging enquiries from overseas customers because it is not economical for them to continue in China, so a lot of orders are being diverted to India also along with other countries”.

Rahul Mehta, President of Clothing Manufacturers Association of India (CMAI) informs, “Basically there are 3-4 things happening in China. One, labour costs have increased; two, raw material costs are also increasing and the last, their currency is becoming slightly more marketable”.

He adds by saying, “As a result of all this the overall costs are increasing and sometimes deliveries are becoming a problem, which is why, global buyers are looking at alternatives like India, Vietnam, Bangladesh and Sri Lanka”.

Delving out the reasons for Indians to be optimistic, Mr DK Nair says, “There are other factors like trade union laws being implemented more stringently, power outages and high cotton prices. All these, will make China less competitive in long run, which will turn in favour of India”.

Mr Mehta also oozed confidence by saying, “We are very confident that India will also get its share of orders, which earlier went to China”.

However he has a note of caution, when he says, “Before we start popping champagne bottles, one should remember that, these buyers are not going to stop doing business in China. It would be a slow process as; these people would test out the Indian suppliers in terms of quality, etc. But there is obviously an opportunity for us to grab”.