Amid growing concerns about the garment sector in Bangladesh, the US International Trade Commission (ITC) has highlighted India’s rising credibility as a preferred apparel sourcing destination. American buyers cite political stability in India as a key advantage, allowing brands to trust in smooth production and delivery processes.
“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,” the ITC report noted. Indian industry insiders are optimistic, expecting an increase in orders. Presently, around 80% of production in India caters to the domestic market.
While the report recognizes India’s competitiveness—particularly in cotton-based garments—it also highlights operational challenges. High labor costs, small production units, and expensive logistics pose limitations for the sector’s scalability. Additionally, India’s limited capacity in manufacturing man-made fiber (MMF) products restricts further growth, as some brands view the country as more specialized in cotton garments.
The ITC profiled India along with other key garment exporters such as Bangladesh, Pakistan, Indonesia, and Cambodia. These countries, along with Vietnam, gained market share from China over the past decade. Notably, China’s share in US apparel imports fell from 37.7% in 2013 to 21.3% in 2023. During the same period, India’s share increased from 4% to 5.8%, with exports totaling $4.6 billion last year, making the US India’s largest market for apparel exports. Vietnam emerged as the biggest beneficiary, boosting its share to 17.8% from 10% over the last decade.
The ITC emphasized India’s strengths in vertical integration, particularly in the cotton garment segment, due to the availability of most inputs domestically. This comprehensive value chain integration enhances India’s appeal as a reliable supplier.
Mithileshwar Thakur, Secretary General of the Apparel Export Promotion Council (AEPC), welcomed the ITC’s recognition of India’s strengths beyond cost efficiency. “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 specializing in high value-added products, requiring high-skill levels and with the highest degree of reliability,” Thakur told TOI. He also appreciated that the ITC assessed factors such as supply chain reliability and product differentiation, rather than focusing solely on cost.
With one-third of India’s apparel exports heading to the US, the country is positioned as the fourth-largest supplier to the American market. However, addressing challenges related to labor costs, production capacity, and MMF products will be crucial for sustaining and expanding this momentum.
India’s apparel industry is eager to capitalize on its strengths, hoping to increase market share and cement its reputation as a reliable, high-quality supplier amid evolving global trade dynamics.
