According to the recent survey about market statistics conducted by CMAI, currently the total size of the Indian apparel industry is around Rs 2,00,000 crores. Out of this, unstitched apparels like dhotis and sarees constitute Rs 50,000 crores. The size of organized retail sector is around Rs 40,000 crores, whereas the remaining Rs 1,10,000 crores is the size of the unorganized apparel sector.
“The growth rate of the organized branded apparel industry was zero during the last two years when there was 10 percent excise duty on this sector. After the removal of excise duty, the growth rate is expected to be around 6 to 7 percent for this year and 10-12 percent for the next year,” the report added.
CMAI Report: Segmentwise classification
According to Mehta, the overall proportion of women’s wear in the world is much higher whereas in India, the men’s wear constitutes a higher portion. “Although traditionally Indian women wore more unstitched apparel like sarees, the trend is now changing in India. Women wearing sarees were gradually changing over to salwar kameez and those wearing salwar kameez are now changing over to western outfits. Thus, a rapid growth rate is anticipated in the women’s wear segment,” he opined.
He further stated that there are three main obstacles in the growth of the Indian apparel industry: first is, prices of raw materials like cotton and cotton yarn have been on constant rise due to free export. “So export of cotton and cotton yarn should be restricted by the government in order to keep the local prices steady. Secondly, due to the lure of government schemes, the workers of the garment industry are migrating to their native places in Uttar Pradesh, Bihar and Jharkhand etc. This has created a huge shortage of workers in the garment industry and thirdly, due to discount war, the regular marketing channels were disturbed. Fashion brands were only able to sell 45 percent to 50 percent of their merchandise at their regular prices,” he added.
On the export front, Mehta informed that last year’s export was approximately Rs 72,000 crores which are expected to reach Rs 80,000 crores this year. “Due to the weakning of Indian rupee, our exports are expected to rise further in rupee term. Our competing countries like Bangladesh and China are facing labour problems. China is slowly moving out from the labour intensive garment industry towards high-tech and sophisticated products,” he said.
Sliding rupee benefits apparel exports
He further pointed out that present garment exports from China are approximately 10 times more than India. “So, even if 10 percent of China exports get diverted to India, Indian apparel exports could double. Further, the talks on FTA (free trade agreement) between India and Europe have been going on for the last three years and are likely to be finalized in near future. If this Indo-EU FTA happens, it would provide duty free access to Indian garments in Europe, giving a huge boost to the Indian apparel industry,” he explains.
The association has also launched ‘CMAI’s domestic apparel retail index’ to monitor the health of the garment industry. Presently, the index, with a quarterly indicator, has an involvement of 50 brands and expects to grow up to 200 brands, who would share their data with the association in order to capture the trends in the industry.