The fall of India's textile monopoly


Friday 3rd November 2017
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The fall of India's textile monopoly

For many decades, India has had the major leg up on the textiles industry. However, it is starting to struggle to maintain itself as foreign customers start to look to invest in alternative solutions closer to home. What are the causes of this fall?

Sustainability

Part of this is due to sustainability concerns. Many companies are looking to invest in a sustainable, eco-friendly uniform for their staff. As such, when it comes to creating workwear, there is much closer scrutiny over supply chains and how products are being manufactured. They’re also looking to reduce their carbon footprint on how far their products have to travel.

Ethical business practices

When working with textile manufacturers, many foreign businesses are looking to ensure staff producing their corporate wear or PPC are being paid a fair wage, and they also want to guarantee the quality of the fabrics being used in their products. They’re opting for slightly more expensive, yet better for the environment, materials, such as organic cotton. A lot of producers are offering this at home, and there is a lot to be said for supporting homegrown businesses.

Labour shortages and restrictions on foreign investment

Then there are the chronic labour shortages that have been affecting India for the past several years. India has been looking to China to learn more about luring skilled workers to the garment industry, and to try to promote investment into textile factories. This lack of workers has come about as a result of India’s slowing economy, which has, over previous years, not been expanding at the same rate as it was ten or so years ago. It is thought this slow growth is because many foreign businesses are reluctant to invest in poor infrastructure when it comes to power and transport, plus uncertainties with taxation. There have also been a lot of restrictions in direct investment from foreign companies.

For the staff that are available, Indian textiles companies are having to invest some of their profits into housing staff who have come from remote parts of India. This can mean designing and managing dorms for an average of 2,000 to 4,000 workers, which can take time and money away from investing in factories and identifying new business.

Competition

The fall of India’s textile monopoly is also down to the matter of competitors affecting India - for those looking to outsource abroad, China remains a top rival. There are also smaller underdog countries, such as Ethiopia, which are fast growing as a go-to hub for textiles and garments. Many global brands have already set up their factories in Ethiopia thanks to the array of financial and operational benefits that the country offers.

Other issues that have affected India’s garment industry include the crippling power shortages across the country, poor infrastructure that is permanently underdeveloped, fragmentation in the workflow, and a high turnover of staff. There are also mounting concerns over working conditions, in which many brands are now calling for changes - and fast.

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