Knitwear Industry: A promising opportunity in India

Despite being strong in wovens, the knitwear industry in India is on a double digit growth trajectory. The industry is gearing up for bigger play in the Indian apparel industry. The Indian knitwear industry has witnessed strong growth in past one year.

Globally, trade in knitwear fared better compared to wovens and there is an increased demand for knitted apparels. A study by consultancy firm Wisedge, knitwear constitutes 50 percent of the domestic apparel market in India and 45 percent of the apparel exports from India. Globally, knitwear grew at a CAGR of seven percent (from 2005-11) and is expected to grow at a much faster pace in coming years. In India too, the growth of knitwear has been upward of 9-10 percent.

Its growing acceptance has helped boost the knitwear industry in India. As Rupesh Puri, Director, Hues explains, “At one time you’d hardly find T-shirts on 40-year-olds. But now the picture has changed considerably.” Traditionally India has been wovens-based. Adds Rajiv Ramchandani, Director of Tantra, “Many consumers wonder why they should pay Rs 800 for a T-shirt when they can get a good shirt for Rs 1,200. The fact is T-shirts suit the Indian climate.”
Despite the growth story, the segment is facing its own set of troubles and rising cotton and yarn prices is the most immediate one. Strong competition from global brands is another challenge. Davinder Singh Mankoo, Partner Granzstein & Gavio, adds, “International brands have arrived in the market. However, higher priced brands are not a challenge, but some of them come at lower price points. Naturally customers prefer them.”

Another problem is that the industry is fragmented. As Ashish Dhir Founder and MD, Wisedge points out, “Processing is one area where the country lags and players can enhance the value of products by applying innovative finishing systems.” And as Usha Periasamy, VP Operations and Brand Head, Classic Polo, says, “There are very few players in T-shirts because a heavy investment is required. The infrastructure is very specific. It’s a risky business.”

Bangladesh today is one of the biggest reasons for decline in India’s knitwear industry. What helps Bangladesh and gives them an edge over India is the cost, their wages costs are lower. It is able to give cheap products at lower costs. But Vikram Chopra, Rishi Chopra, Managing Directors of Raves, feel these impacts are short term. “Some big brands tried outsourcing from Bangladesh but discovered that the logistics costs were huge. So the cost effectiveness which they looked at did not actually happen.”

What’s more in knits, Bangladesh has yet to reach a level to be a threat to Ludhiana or Tirupur. And the removal of excise duty on branded garments has come as a boon. Rajat Misra, Vice President-Marketing and Designing UV&W avers, “Prices are more manageable. It will have a good impact on sales.”

Today, the knitwear industry is spread across the nation. It used to be Tirupur and Ludhiana. “There is a good knitwear industry in Bangalore, Gujarat, Rajasthan. Vapi has some good units. I don’t think it is restricted only to one region,” says Hitesh Ruparelia, Director Sweet Dreams Lounge.