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Garmenting growth

After receiving a setback in the last fiscal, exports of garments have made a recovery in the current fiscal. Continuing the uptrend, garment exports registered a handsome increase of more than 33 per cent at Rs 2321 crore for the month of February. In terms of quantity, exports to quota countries improved by 18.5 per cent to 132 million pieces as against 111.4 million pieces in February 2002. Both the major markets i.e the US and EU have made a great comeback. Exports to the US have gone up by 28.8 per cent in terms of quantity and 30.4 per cent in value terms, while exports to the EU have witnessed a climb of 15.3 per cent in terms of quantity and 36.5 per cent in terms of value. Though the exports of garments are gradually moving up, our unit value realisation is still under tremendous pressure due to growing competition in the global market. In fact, the pressure is expected to intensify further as the quotas are phased out in the next few months time. Apart from quality, pricing will also play a very important role in deciding the future course. There is need to chalk out a long term strategy which should ensure quality supply of inputs at reasonable cost as also conversion of the same into end products through deployment of accepted technologies. Our production base needs to tone up on reducing the lead time and other uncertainties affecting the schedules and should strive for productivity gains to grab a bigger share in export markets. The recent budget proposals, if implemented properly, will surely perk up the garment sector which is the upper most segment in the value chain.

The domestic production base continues to be far behind achieving economies of scale. Only if we are able to create adequate infrastructure facility backed by smooth governance in terms of policies, there could be possibility of larger investments in garmenting. In fact, to the advantage of countries like India, garmenting requires the least investment when compared to other links like spinning and weaving. Moreover, the segment is labour intensive. Towards this end, imparting training will also very crucial in impacting the overall production. Productivity of Indian labour has been lower as compared to its competitors. The government’s recent apparel park scheme has to be implemented at the earliest. The success of such parks will depend heavily on the joint venture efforts of the government and private participation. It is time when the project approval committee in the textile ministry expeditiously evaluates all the apparel park project proposals sent recently by various state governments and approve them based on their socio-economic feasibility. Since these projects have got a longer gestation time, any casual approach towards the approval will delay the whole process and may impact the end results considerably. However, the onus of implementation will largely on the individual state which requires to formulate a well carved out strategy.