CHAPTER - III GROWTH AND CONTRIBUTION IN ECONOMY: READYMADE GARMENT INDUSTRY Indian garment industry has played a unique role in Indian economy. The garment sector is the largest employer after agriculture and its importance in India s economy is recognized for its contribution to industrial production and export earnings. Indian textile industry is a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it contributes much to the country's economy. The textile and apparel industry is one of the leading segments of the Indian economy and the largest source of foreign exchange earnings for India. India s share of global exports of textiles and apparel increased from 2.8 percent in 2008 to 6.3 percent in 2012. Readymade garments industry is the harbinger of overall development of the economy as it plays a pivotal role due to its contribution in the industrial output, employment generation and foreign exchange earnings. The industry accounts for approximately 4% to the GDP. The industry being highly labor intensive provides direct employment to nearly thirty million people and is the second highest employer in the country. Readymade garments industry is one of the few industries of India which is self-reliant and complete in the highest value added products-garments. Therefore, the growth and development of this industry has a significant bearing on the overall development of the economy. The Indian readymade garment has its roots going back several thousand years. The industry is undergoing a transformation due to the phasing out of quantitative restrictions and dismantling of tariff barriers which aim at complete integration of textile trade. In such a turbulent environment, the readymade garments industry is required not only to fight for their share in the international readymade garments trade on equal footing, without guarantee of access through quota regime, but also to protect their territory in Indian Market where 51 P a g e
multinational branded garments players have started entering the vast Indian market. (Aggarwal & Singh, 2009). However, India s export growth was lower than that of most Asian countries during that period. The garment industry is the fastest growing industry in the world. From the last few decades, the fashion industry in India has been experiencing an explosion due to considerable dynamic nature which increases fashion consciousness among consumers. Everyone has a separate and elegant fashion sense which is mainly related to the apparels throughout the world. Apparels define the personality, education, behavior and the way of thinking of the people. It is substantial to note that Indian fashion consumers will set the global fashion trends in the coming era. Currently, all international brands are found in India. Indian fashion industry has progressed from emerging stage to successful blooming industry today. The industry is composed of handlooms, power looms and mills. From the total of Indian exports 20% are from textile sector and it provides direct employment opportunities to nearly 35 million Indians primarily the weaker sections. It contributes about 4% of GDP and14% of industrial output including substantial segments. India is in the process of urbanization and industrialization, and is gradually moving towards being a market-based economy. During this transitional period, large numbers of people previously living in rural areas have become urban residents. This gives a unique dual structure to its current consumer market. On the one hand, demand for branded luxury goods is increasing quickly, while on the other hand, major suppliers meet the needs of the medium and low-end markets. Consumers in the medium and low-end market are more sensitive to prices, and fast fashion with lower prices has become popular in recent years. The Indian consumer s lifestyle is undergoing tremendous changes, and the domestic clothing market is becoming more versatile, fashionable and segmented. With demand for comfort dressing increasing, more and more consumers today prefer quality clothing made of pure cotton and other natural. Rising disposable income, large working population especially women, and changing preferences of consumers from need based to experience based, has 52 P a g e
further fuelled the growth of the sector. People today have become fashion conscious and are well aware of the running trends. They are buying branded cloths from shopping malls and discount outlets, which have changed their way of dressing. With growth of the organized retail and expected boom in the retail segment, Indian garment industry is going to take a modernized form and become a major segment in the years to come. The contribution of rural residents to the total consumption of textiles and clothing could be twofold. On one hand, their gradually increasing income could result in growing purchasing power, and larger expenditure on clothing, especially on goods with higher demand elasticity such as fashion goods. On the other hand, a considerable proportion of current rural residents are becoming urban residents; urban living standards and lifestyle will have an overwhelming impact on their attitudes towards fashion, and this change could also promote domestic demand. India is the world s second largest producer of textiles and garments after China. It is the world s third largest producer of cotton- after China and the USAand the second largest cotton consumer after China. The textile and garment industry fulfils a pivotal role in the Indian economy. It is a major foreign exchange earner and, after agriculture, it is the largest employer with a total workforce of 35 millions. In 2009 textiles and garments accounted for about 16 per cent of industrial production and 18 per cent of export earnings. The Indian textile industry is as diverse and complex as country itself and it combines with equal equanimity this immense diversity into a cohesive whole. Endowed with largest loom age in the world, the second highest spindle age, next only to China, a strong multi-fiber raw material base, a vast pool of skilled workers, flexible production systems, a dynamic entrepreneurship together with vibrant design creativity, have all contributed to creating a vibrant textile industry that has long been the mainstay of the Indian economy. The Indian textile garment industry is an enormous complex entity. 53 P a g e
Export and Import Measures Textiles Exports (2012-13) The targets for textiles exports for 2012-13 initially set at USD 38 billion have been revised upwards to USD 39.60 billion, following the Foreign Trade Policy Annual Supplement in June, 2012. The details of exports targets fixed and achieved during the last three years and current year sector and item-wise including apparel, man-made and cotton textiles are as under: Figure 3.1: Details of Exports 2010-11 2011-12 2012-13 Council Targets Achievement* Targets Achievement* Targets Achievement* RMG 12000 11026 14000 13073 18000 12391 Cotton Textile (excl Raw 5000 5792 7000 6808 9000 7517 Cotton) Man-made Textiles 3700 4705 5500 5631 6100 5043 Handloom 300 346 500 554 400 518 Woolen Textiles 630 442 700 508 750 418 Silk Textiles 730 632 800 437 500 406 Handicrafts # 2200 2301 2700 2706 3300 3305 Jute 275 460 350 457 500 387 Carpet 650 1037 800 846 1050 986 Total 25485 26471 32350 31056 39600 30971 *Based on DGCI&S data (Principal Commodities) #As reported by the Export Promotion Council for Handicrafts (EPCH) Imports :- The total imports of T&C products by India reached US$ 5.22 billion during the calendar year 2012. Cotton was the biggest import amongst T&C items, with a share of USD 0.77 billion followed by impregnated textile fabric (USD 0.74 billion) and Man-made Filaments with a share of USD 0.73 billion. 54 P a g e
The imports have increased by 5.26% during the calendar year 2012 in dollar terms over the corresponding period in calendar year 2011. Export Promotion Measures :- The Government has been continually supporting the textiles exports sector through various provisions of the Foreign Trade Policy and the other policy initiatives to enable the sector to increase market share in the global textiles markets. Slowdown in Exports of the Textile Sector and Policy Measures Taken :- As per latest exports figures (Principal Commodities) released by the DGC&IS, textiles & clothing worth USD 26.82 billion was exported during 2010-11 and USD 33.31billion during 2011-12. During 2012-13, exports of textiles & clothing were of the order of USD 31.71 billion as against USD 33.31 billon in 2011-12, recording a negative growth 4.82%. The volatility in the EU market during the calendar year 2012 affected severely India s T&C exports to EU. The EU textiles market witnessed a negative growth of 13% during the calendar year 2012, resulting in a 1.3 billion shortfall of India s T&C exports to EU during the Calendar year 2012 over 2011 Policy realignment for apparel sector urgently required - duty drawback/ incentives under FTP/ duty reduction in fabric/ yarn imports. MSP sales plan needs to be put in place. CITM has held 2 rounds of discussions. TUFS committed liabilities crowding out new sanctions. At the Processing Stage there is a need to provide the technical and financial assistance to processing units that will enable industry to meet environment sustainability objectives without making themselves uncompetitive in the international market. At the Apparel Stage amendment to Labour Laws is urgent, to permit longer hours of overtime with due compensation, and to allow flexi-hiring of labour, ie according to variations in orders. There is a need to adopt the model of development of infrastructure of workers housing and workers dormitories along with work spaces, to enable expansion of scale. Encourage and also support innovative start-up models like hiring of built up work space for a-move-in-andbegin strategy that does not require investment up front. 55 P a g e
The textiles sector in India is keenly looking forward to the finalisation of the India-EU BTIA, which would considerably open up trade in textiles sector with EU countries. A very favourable stance has been taken by the Ministry of Textiles with regard to textiles trade with Europe in terms of the broad based agreement with EU. Figure 3.2: India Import Statistics The Government has been continually supporting the textiles exports sector through various policy initiatives to enable the sector to increase market share in the global textiles markets. Government has introduced several export promotion measures in the Union Budget 2012-13 as well as through schemes of Foreign Trade Policy 2009-14, including incentives under Focus Market Scheme and Focus Product Scheme; enhancing the coverage of Market Linked Focus 56 P a g e
Product Scheme for textile products and extension of Market Linked Focus Product Scheme etc to increase India s share in various countries. To ease the resultant financial distress, recognizing the Handloom sector as the most vulnerable segment of the Textile industry, Government has announced a Handloom Revival, Reform & Restructuring Package under which Rs.3884 crore was allocated for waiver of loans of handloom cooperatives, individual weavers, etc. and for interest subsidy, margin money and credit guarantee for fresh loans. Government also approved a debt restructuring package to help loss making textile mills, to be administered on a case by case basis by the banks within the prudential norms of the Reserve Bank of India. The recent measures taken by the Government to support the textiles exports sector are as under : i) 2% Interest Subvention Scheme on rupee export credit is available to certain specific export sectors. These are (i) Handicrafts, (ii) Carpets (iii) Handloom, (iv) Readymade Garments, (v) Processed Agriculture Products, (vi) Sports Goods and, (vii) Toys. In addition Small and Medium Enterprises (SME) in all sectors enjoy this benefit. Currently the scheme ends on 31st March, 2013. Now this scheme of 2% interest subvention to these specific sectors will be extended by one more year, i.e., up to 31st March, 2014. ii) Introduction of a new scheme to incentivize incremental exports in certain sectors and to certain markets (incremental export performance for the last quarter of the year, i.e. for Jan-March 2013 as compared to exports made by the same IEC holder in Jan-March 2012 would be eligible for such incentives); and iii) Five new countries have been added under the Focus Market Scheme while Eritrea has been added under the Special Focus Market Scheme. The five countries being added under FMS are New Zealand, Cayman Islands, Latvia, Lithuania and Bulgaria. 57 P a g e
Figure 3.3: India Export Statistics The industry covers a wide range of activities. These include the production of natural raw materials such as cotton, jute, silk and wool, as well as synthetic filament and spun yarn. In addition an extensive range of finished products are made. The Indian textile industry accounts for about 24 per cent of the world s spindle capacity, making it the second highest after China, and around eight per cent of global rotor capacity. Also, it has the highest loom capacity including hand looms with a 63 per cent share. India accounts for 58 P a g e
about 14percent of the world s production of textile fibers and yarns. This includes jute, of which it is the largest producer. The country is the second largest producer of silk and cellulose fiber and yarn, and the fifth largest producer of synthetic fiber and yarn. The Indian textile industry is as diverse and complex as country itself and it combines with equal equanimity this immense diversity into a cohesive whole. Endowed with largest loom age in the world, the second highest spindle age, next only to China, a strong multi-fiber raw material base, a vast pool of skilled workers, flexible production systems, a dynamic entrepreneurship together with vibrant design creativity, have all contributed to creating a vibrant textile industry that has long been the mainstay of the Indian economy. The Indian textile garment industry is an enormous complex entity. The Multi Fiber Arrangement (MFA) that came to an end on January 1, 2005 has opened up a plethora of opportunities for the Indian textile industry. The phasing-out of MFA has ensured that quota restrictions in US, European Union and Canada which restricted textile and apparel exports from India to these regions have been removed. India and China are the two countries poised to derive the maximum benefit from the MFA. The Indian Government is trying exports to create an environment to attract an investment of Rs1, 400 billion in the Eleventh Plan period (2007-2012) when the textiles and garment are expected to rise from the US$14 billion to US$40 billion. Global trade in textiles is increased to US$ 600 billion by 2010 from US$ 356 billion in 2003. Indian government is turning its attention towards the ever growth of Indian textile sector and also to remove the bottlenecks that hinder its growth. The textile industry, being one of the most significant sectors in the Indian economy, has been a key focus area for the Government of India. A number of policies have been introduced by the government of India for the betterment of this sector, The Technology Up gradation Fund Scheme; (ii) Integrated Textile Parks Scheme; (iii) Excise Duty Scheme; (iv) Foreign Direct Investment (FDI) Policy. India has been ranked as the top retail destination globally for retail investment attractiveness among 30 emerging markets in the world. 59 P a g e
The Indian retail sector is the second largest untapped market after China. Readymade garment is a part of the textile industry and it accounts for about half of India s textile exports. India s consumer market for readymade apparel has become varied by surge of more designer brands. India is becoming the most preferred destination for outsourcing readymade garments for the international market. Apparel is an ideal industry for examining the dynamics of buyer-driven value chains. The relative ease of setting up clothing companies, coupled with the prevalence of developed-country protectionism in this sector, has led to an unparalleled diversity of garment exporters in the third world. Furthermore, the backward and forward linkages are extensive, and help to account for the large number of jobs associated with the industry. According to Fashion Design Council of India (FDCI), apparels created by Indian designers are going to play a major role in the growth of the apparel industry in the next few years. These changes will have far-reaching implications for designers, manufacturers and retailers targeting the Indian apparel market. The Indian textile and apparel industry is the largest foreign exchange earner for the country. It is also the second largest employment provider after agriculture and plays a key role in the development of the economy (Shetty, 2001; Rajput et al, 2012). Readymade Garments Industry in India :- The garment industries in India are concentrated in Bangalore where some of the largest export houses of the country are existing. Today overseas buyers view Bangalore as an important location for sourcing of garments after Bombay and Delhi. Brand images are being felt in this region and there is a great potential for production of value added goods. Garment industries in Bangalore started from the period of British. M/s. Bangalore dressmaking Co. was the first unit, started to manufacture garment in Bangalore during 1940, which was started by Mr. Vittal Rao. During the rule of British, there was a need of clothing dress materials. This led to the development of RMG industries in Bangalore. Apart from RMG industries, there were silk weaving industries in Bangalore, which led to the development of silk exporters also. After India s independence in 1947, the industries started picking up slowly to cater the needs of dresses of the common man and local market. The 60 P a g e
industry started flourishing. Most of RMG industries are concentrated in Bommanahalli and Peenya industrial estate. After the de-reservation of garments, big players like Mafthlal, Aravind Mills, etc. started entering the field and occupied places in the sector which indirectly affected the small scale sector. There are about 3000 RMG units in and around Bangalore. Most of the buying agencies in the world have established their branch office in the city. Apart from this, Apparel Park, at Doddaballapur has started functioning in a big way. In India, RMG units are concentrated in the cities like Delhi, Mumbai, Kolkata, Bangalore, Chennai, Jaipur, Tirupur, and Ludhiana. There is a different in the end products manufactured at Bangalore and other places. RMG are mainly made for export house. There are many SSI units mainly doing job work providing supports to the SME like GE, Aravind fashion, Sonal Holding, Texport Syndicate units in the cluster. The technology and manufacturing process are same as used in other regions. The economy of Bangalore is inextricably mixed up with that of readymade garment industry. 30 per cent of the Readymade Garments of the country are made in this region. This is third biggest readymade garment manufacturing cluster in the country. Till 1990 the business performance of this cluster (mainly exports) and the emergence of new units kept on increasing steadily. However, after 1990 till 2000 the effect of liberalization was slowly felt and the level of competition kept on intensifying. During 2000-2003, around 30 per cent of units were closed due to lack of orders and competitions. Other units are running well but still some of the units are planning to close down due to financial, marketing and labor problems, which were revealed during the visits. One of the most important attributes of Readymade Garments Cluster Bangalore is the existence of inter-firm and Intra-firm linkage. The firms are mostly integrated horizontally and not vertically. Because of high scale of operations and sub-contracting relationship, the cluster is capable of executing all sorts of orders. Even there are firms, which have no manufacturing base but still book large orders, and get the products manufactured through fabricators and execute the orders. There are few firms, which are vertically integrated and do most of the operations in house. The large scales of operation and sub- contracting arrangements have resulted in flexible specialization. 61 P a g e
A steady inflow of foreign exchange is one of the dominant features of the economic contribution of the textile trade. Successive government policies have consistently encouraged measures to exploit our comparative advantages to increase exports. The exclusivity of our handlooms, the uniqueness of silk, the flare of our fashion designers, the delicacy of our carpets and the cost competitiveness of our power loom cotton fabrics have kept up a steady interest in Indian textiles and made the task comparatively easy for an exporter. With a view to raise India s share in the global textile trade to 10 per cent by 2015 (from the current 3 per cent), the Ministry of Textiles has proposed 50 new textile parks. Out of the 50 proposed parks, 30 have been already sanctioned by the Government (with a cost of US$ 710 million). Set up under the Scheme for Integrated Textile Parks (SITP), this initiative will not only make the industry cost competitive, but also enhance the manufacturing capacity of the sector. A number of indicators are normally used to measure competitiveness of Indian apparel exports. Within the changing global garment scenario, in which growth of garment exports to leading markets are expected to increase considerably using the non- barrier channels, India would definitely try its hand to corner a good share through whatever means at its command. But, the ground on which India stands to stretch its hand to corner such a share also needs to be analyzed in order to understand the probable ability of India to succeed in this venture. A number of firms have implemented ISO standards for quality, environment management, occupational safety and health of workers besides social accountability standards Bangalore, Mumbai, New Delhi and Tirupur thus carved out a prominent place in the international market place for woven wear and knitwear and reputation as a reliable source of quality woven wear and knitwear at competitive prices, manufactured by adopting best manufacturing practices and delivered in time. Today, there is no big international brand that is not sourcing its requirements of woven wear and knitwear from Bangalore, Mumbai, New Delhi and Tirupur. The sustainable development achieved by Bangalore, Mumbai, New Delhi and Tirupur woven wear industry has resulted in an incremental growth of export. Suddenly many international agencies began to take notice of these cosmopolitan cities in India 62 P a g e
as it is today, Bangalore, Mumbai, New Delhi and Tirpur industrial system is obviously not sustainable. It is characterized by heavy pollution, misuse and depletion of critical resources like land/soil, and water. Even after a decade since the above Industrial Ecology study, the situation of Bangalore, Mumbai, New Delhi and Tirupur seems to have been moving only at a snail s pace towards sustainable industrial practices. There were many efforts launched during the last decade through government, entrepreneurial and civil society initiatives. For building Indian brands in global apparel market it is necessary for marketers to increase the value of their products by branding. It is evident that there are still only a few apparel exporters able to create a brand in the global market except the supply of international buying houses or retail chains as per the specifications and designs provided by the buyers putting labels or brand name as stipulated by the buyer wherein the exporters voluntarily hide their identity in the global market. Although, the Indian apparel exporters do have the capability to produce as per the requirement of global market, their main drawback lies in strategic thinking in creating their own brands. Moreover, many global brands are also entering the Indian market, making Indian brands clueless as to how to survive the competition. This situation necessitates the marketers to strengthen their brands for their stay in the market. This might be possible only when the marketers consider branding not as a set of activities, but as a strategic thinking. To compete in domestic as well as global market place in the long run, the marketers must create and manage strong brands - vital in creating loyal customers which would pose a formidable defense in the competitive market. Branding requires putting conscious efforts to build the society s perceived value of the product based on components such as reputation, experiential and symbolism. Prevailing Trends in Indian Readymade Garment Industry :- Textile industry in India is widely comprehensive, integrating whole range of raw material to finished product that includes fibre manufacturing, spinning, knitting and weaving, and garment manufacture. In recent years, the readymade garment segment has seen vertical growth. Accounting nearly Rs. 20,000 crores, this industry is growing at the rate of 20 percent, with massive visibility and consideration 63 P a g e
margins. The largest segment for the readymade garment segment includes the agegroup of 16-35 that is very brand conscious and gives priority to high quality. Branded readymade garments account over 21 percent of the readymade garment industry. Despite substantial growth, comparing to the international readymade garment market of nearly 183mn USD, the Indian readymade garment market is still in a budding phase. Due to the higher the introduction cost of brand in India for the foreign players, domestic players have no fear of any outside competition. The main obstacle to the organized players is the huge unorganized scenario of the market. In a move to compete, the organized players have rolled out their own strategy of standardizing the goods. The brands introduced by these major textile players hold much intrinsic power and high on quality and pricing factors. They present the inheritance and constancy in the garment piece. Siyaram's is venturing into readymade garment to grip the continuously changing fashion trends. It is becoming a prominent designer of men s readymade garments and accessories from fabric manufacturer. The two major unique selling points of the recently launched Siyaram's brand, Monday to Sunday Dressing would be the widespread 30,000 retail outlets, where it is selling fabrics and second, the fabric quality that Siyaram's has, which guarantees that the buyer gets the high quality at a cheaper price. The other growing strategy major textile players adapted is Acquisition. Many of companies have used this strategy to dive into readymade garment segment. Raymond's acquired Colorplus to jump in casual-wear, adding brands like Raymond s, Park Avenue. Opting the similar strategy, other brands acquired garments division and entered the luring apparels market with the successful brands like Lee, Koutons etc. The above initiatives taken by the major brands depicts that the textile players now started opting strategies to mark their presence in the readymade garment segment. Their sheer benefits laze in substantial production capacities, which can launch new products in minimum lead-time, offering high quality. Despite the smaller players in the unorganized market is in much more advantageous situation, in the long run they might lose out. 64 P a g e
The following are few problems faced by smaller players :- Smaller Market : There few cities and towns that they can concentrate on, since these cities holds about 50 percent of the Sec A&B of population that have a disposable income. As a result, very few opportunities are there for smaller players. Limited Capacities : The restriction that these smaller players have is that they cannot emerge beyond a definite level. Additionally, inadequate logistics and improper supply chain managements created huge problems for the smaller players. Inadequate Logistic & Strength : For advertising and brand building, these smaller players are forced to extend their reach geographically, which makes supply chain management more complex. To match with increasing demand in competitive markets, stress on producing volumes also increases. To sustain existence these players will have to inject in more investments to their businesses in the areas of designing capabilities, brand making and retailing. Insufficient Funds : Funds will be a key restraint for the smaller players. Funds have to be spawned rapidly in a massively capital demanding market that is seeing huge volumes of growth. As per the industry forecasters, the textile majors are planning to take hold on the readymade garment market by entering into complete entire value chain. Players that are not making fabrics for kids wear and sportswear may start producing the same to enter this segment. Apart from the above-mentioned strategies, there is one more initiative to rule out in the readymade market that is foreign collaborations. Textile Company based in Rajasthan, Banswara Syntex shake hands with French readymade apparels major Carreman. It is a joint venture initiative with Carreman Michel Thierry. The joint venture company is called Carreman Fabrics India. Creation and focusing in the value chain strengthens the smaller players. The main factors where the brands need more concentration are designing, 65 P a g e
production, quality and merchandising. But, the designing is the most significant of the value chain, which requires maximum focus. The merchandising is noteworthy factor stage for the smaller players, as involvement, creation and fabric selection adds value to the creation. The retailing is also an important factor for the smaller players. They may face problem if their merchandize remain for long on retail shelves, since the value of the fashion drops, resulting increase in inventory costs. Today, the buyers of readymade garment segment are aware of the running trends, and demand the newest in fashion and products at a reasonable cost. At the front position of this evolution are the smaller players, which private labels that are thoroughly transforming the dressing way of men, women and children. With the supply chain limitations eased, organization in real estate markets, and rationale tax structure, the readymade garment segment has become more lucrative and it is anticipated that the readymade garment segment will be the main segment in the next five years. Latest Trends in Indian Garment Exports :- The latest data available from the AEPC and other secondary sources though deficient in many macro and sectoral aspects, is also not much encouraging with regard to India s position in the world garment market though it records remarkable growth compared to the last decade. The increased volume of trade is facilitated by phasing out of the barriers through the ATC integration. In the last few years, the Indian exporters have been able to create a niche for themselves in global markets. This comes from delivering products of exceptional quality as well as on time at competitive rates. According to experts, these exporters can turn in this acceptance to an opportunity. For instance, for the last many years, Indian textiles have been well accepted in international markets for their exceptional quality, so even if these products were to be expensive by a small margin, the buyers would still flock to Indian shores, since the domestic exporters have created a very good reputation for themselves. But the current price difference, when compared with those of other countries is very much on the higher side to entice an international buyer. This price difference comes from the high cost of basic raw materials, which normally 66 P a g e
account for 50-60 per cent of a finished product cost. Other than raw material costs, high logistics and capital costs are hampering the growth of the industry. Indian cotton is priced at least 14-15 per cent higher than those prevailing in global markets. In the new cotton season that began a few months ago, the government decided to increase the Minimum Support Price (MSP) of cotton by a whopping 25-40 per cent, which resulted in increased pressure on the textile exporters. Analysis of Garment Industry in the Indore Region :- The aim and objective of the research is to study the brand of readymade garments in Indore city. This could have a positive impact on the global garment sector for achieving economic, social production systems. In a general manner for holistic analysis of the realities in Indore garment cluster. Target beneficiaries of the project are various stakeholders in the textile-garment industry of India who are producing different brands and those who wish to enter the value chain. The growth in business and incentives offered by government in the form of duty drawback, income tax exemption and other schemes for export promotion enabled the exporters of Indore, Bangalore, Mumbai, New Delhi and Tirupur to plough back their entire profits into expansion and modernization of production and processing capacities. Garment manufacturers and exporters association has initiated a number of huge projects to improve infrastructure facilities with the participation of central and state governments, national and international financial and funding institutions. Soft skill development has also been taking place in tandem. A number of firms have implemented ISO standards for quality, environment management, occupational safety and health of workers besides social accountability standards (SA 8000). Indore, Bangalore, Mumbai, New Delhi and Tirupur thus carved out a prominent place in the international market place for woven wear and knitwear and reputation as a reliable source of quality woven wear and knitwear at competitive prices, manufactured by adopting best manufacturing practices and delivered in time. The redeeming feature of this all encompassing transformation is that it is continuous. The time lag in introducing new technologies from any part of the 67 P a g e
world is zero. Over the years, Bangalore, Mumbai, New Delhi and Tirupur has emerged as the leading woven wear production centre in the country. Due to hard work, dedication and tireless perseverance of the exporters to meet demands of buyers for quality, competitive pricing and adherence to delivery schedules. There were many efforts launched during the last decade through government, entrepreneurial and civil society initiatives. Given the kind of enthusiasm shown by almost all stakeholders, though there are skeptics too, it may not be an unachievable dream but require highly coordinated and committed efforts by all stakeholders concerned. It is clear that the global garment industry, like many other sectors, is on a course of change under the newly placed international trade regimes. It is especially interesting to note the changes due to the lifting of protectionist regimes at the consumers-end through the WTO mechanisms. While these changes would lead to increase in production and product diversity available to the consumers at competitive prices, the impacts of such non-barrier trade regimes on the actual locations of production in terms of achieving higher quality of life for the stakeholders would require some level of probing as such impacts remain either ambivalent or unclear due to deficiency of information. It is observed that heightened competition, in the wake of quota-free regimes, between the various production locations (mostly less developed or developing nations) to gain the wide and high markets of the developed nations may lead to assuring cheaper, high quality products to the already well-off segments of humanity. Simultaneously, the mad race for markets at highly competitive prices (as competition too get intensified through non-quota trade regimes) would lead to neglect of the survival needs of the majority of humanity in the Less Developed or Developing (Non-Industrialized) producer countries. While this is also partly due to the current international monetary system, based on artificial exchange values for various currencies, which is largely beneficial to the developed markets of the developed nations, seeking non-barrier integration in the currency exchange system will be the last wild dream that can be achieved in the globalized economy. The global economic system is permanently geared towards the higher benefits of those who have the purchasing power to shake and shape the market. It has no time 68 P a g e
to hear the wails and weeps of the ones who produce for these markets as a means for daily survival. Therefore, it is essential to note here some of the essential characteristics of the global garment industry, within the wide frame of the global economy, as a prenote to understand the dynamics of garment production and exports. This is especially important because improving quality of life of stakeholders at the production-end of garment industry with the help of certain levels of buyer-pressures that has been emerging due to various factors at the buyers-end, in relation to consumption/product standards of the clothes. The new consciousness concerning 3Fs (Fair Price, Fair Say, Fair Share) and 4Cs (Produce clean, Eat clean, Wear clean, Live clean) that engendered in the developed world. Conclusion:- While the emerging characteristics of globalization-based growth in the garment industry needs to be mentioned here as a window to understand the global dynamics of the woven wear and knitwear production and India s position within this dynamics and how Indore fits study region, are getting emerged but buying agents and family connected business units have become indispensable to some extent. But, there is a small section of second generation, new, educated entrepreneurs, emerging slowly in the study region. The government-national, state and local municipal administration has been very slowly to cope with the sudden leap of Indore into the global garment market. The demand-supply duality even affected almost all the social inputs for life and resulted in high cost escalation. The present export-driven prosperity made Indore entrepreneurs to meet these costs, but deficient supply of infrastructure and other social inputs would prevent further growth. --- --- 69 P a g e