India: A Rising Global Hub for Apparel Manufacturing and Exports

25 October 2023, Mumbai

Why India

India is attracting global apparel brands with its promising growth potential, abundant skilled workforce, competitive costs, growing domestic market, and strategic location.

Video Insights
Favorable government policies
The Indian government has launched several favorable policies to encourage apparel manufacturing and innovation in the country. Some examples include:
Production-Linked Incentive (PLI) Scheme: The PLI scheme provides financial incentives to companies that set up manufacturing units in India and produce eligible products. For example, the PLI scheme for textiles and apparel provides an incentive of 7% to 11% on incremental sales of eligible products.
National Technical Textile Mission (NTTM): The NTTM is a government-led initiative to develop the technical textile sector in India. The NTTM provides financial assistance to companies for research and development, technology upgrades, and infrastructure development.
An abundantly skilled workforce

India has a large and skilled workforce in the apparel industry, with more than 45 million people working in the textile sector. The government also invests in skill development programs to improve the quality and productivity of this workforce. For example, the Apparel Made-Ups and Home Furnishing Sector Skill Council (AMHSSC) is a government-industry partnership that provides skill training to workers in the apparel industry.
Competitive costs
India offers low-cost production options for apparel brands, with lower wages, land, and energy costs than developed countries. For example, the average hourly wage in India's apparel industry was $0.58 in 2019, compared to $16.2 in the US. This cost advantage makes India an attractive option for brands looking to cut down on production costs.
Growing domestic market
India's domestic apparel market is growing rapidly and is expected to reach $100 billion by 2025. This rising demand creates a huge opportunity for global apparel brands to increase their market share in India.
Strategic location
India's location at the junction of Asia and Africa gives apparel brands easy access to key markets on both continents. Moreover, India has a well-developed infrastructure of ports and airports that enable smooth import and export of goods.
Case studies
Several global apparel brands have already expanded their operations in India, attracted by the country's favorable factors. Some examples include:
H&M: H&M, the Swedish fast-fashion retailer, has been present in India since 2015. The company has over 50 stores in India and plans to open more stores in the coming years.
Uniqlo: Uniqlo, the Japanese fast-fashion retailer, entered the Indian market in 2019. The company has over 10 stores in India and plans to open more stores in the coming years.
Zara: Zara, the Spanish fast-fashion retailer, has been present in India since 2010. The company has over 20 stores in India and plans to open more stores in the coming years.
Opportunities for further growth
India has the potential to become a global hub for apparel manufacturing and exports. However, there are some areas where the country can improve to further boost its appeal to global apparel brands. These areas include:
Infrastructure development: India can improve its infrastructure, such as roads, railways, and ports, to facilitate operations for apparel brands.
Bureaucratic simplification: India can simplify its bureaucratic processes and reduce red tape to make it easier for apparel brands to start and run businesses in the country.
Sustainability focus: India can focus on developing sustainable practices in the apparel industry, such as the use of recycled materials and renewable energy.
By addressing these areas, India can position itself as a global hub for apparel manufacturing and exports.

5 key insights:

• Promising growth potential
• Abundant skilled workforce
• Competitive costs
• Growing domestic market
• Strategic location

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