The Hindu

India set to emerge as major supply hub for textile industry

9 July 2006

New Delhi: Foreign firms are likely to play a key role in the future growth of the Indian cotton and textile industries with the emergence of the country as a competitive clothing supplier in the global arena, a recent report from the US government's agriculture department said.

While China has remained a preferred supplier so far, global firms are also becoming increasingly interested in India-- "both to reduce risk through diversification and because of the growing perception of India as a competitive clothing supplier with domestic sources of fabric," the US Department of Agriculture's Economic Research Service said in a report.

Global retail giants like Wal-Mart, JC Penney, Gap and branded apparel marketers such as Calvin Klein, Lacoste and Sara Lee are among the major companies which have been attracted to India because of its potential to provide one-stop shopping.

While, Wal-Mart has expressed willingness to buy goods worth 7-10 billion dollars from India over the next 2 years, J Penney also plans to make India an important sourcing hub for apparel and recently expressed its intention to buy 2 billion dollars worth of products annually, the report added.

The global clothing market is dominated by the buyer-driven commodity chains today, in contrast to the auto, computer, and aircraft industries that are driven by producer commodity chains where manufacturers exert control over raw material suppliers as well as distributors and retailers.

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