Chennai: India’s garment exports could jump from $16 billion to $19 billion-$23 billion from better coordination between fabric mills and garment units and improved productivity gains, according to a report by Vector Consulting. It argues that fixing fragmented supply chains, improving asset utilisation, and achieving productivity gains could unlock an estimated $3-$7 billion in additional garment exports from existing capacity.While wage costs, inverted duties, and market access are often cited as reasons for India’s underperformance in the global textile and apparel market, the report points out that a fragmented supply chain leads to poor efficiency and quality, fewer orders, higher costs, and a self-reinforcing cycle of lack of competitiveness that limits sales.India is the world’s second-largest producer of textiles and garments, yet it accounts for only about 4% of global textiles and garments trade. A survey of senior textile industry executives estimates that 35%-45% of fabric produced by Indian mills is exported without further value addition, only to later re-enter global markets as finished garments produced elsewhere, it said. A coordinated production ecosystem could improve sewing efficiency to 80%-85% from 58%- 70%. This is expected to boost factory operating profits by approximately 80%-200% and break the perennial underinvestment in the sector. The next wave of export growth will come not from adding factories, but from better integration of the production systems and resulting better financial returns will lead to fresh investments.
