More than a month-long tussle at borders between India and China seems to have settled down now, at least for some time. Indian apparel exporters face the heat of these developments as Chinese goods were not getting cleared at customs and Apparel Export Promotion Council (AEPC) has sought the Government’s support in this regard, by writing a letter to M. Ajit Kumar, Chairman, Central Board of Indirect Taxes and Customs. Finally, things have started moving but the issue doesn’t stop here, as Indian textile and apparel industry majorly depends on the imported goods from China. And trims are one of the product categories imported mainly from China on a regular basis. A large number of traders are totally dependent on Chinese trims; and same is the case with many apparel manufacturers. So, is there any solution that can help India reduce its dependency on trims’ import from China? What is the takeaway for apparel exporters in this regard? Why doesn’t India explore Bangladesh to import trims? How will nomination work now as far as Chinese trims companies are concerned? Apparel Resources analyses it all with various stakeholders of the industry.
As per the official data, India imports more than US $ 140 million (Rs. 1,000 crore) worth of trims like zippers, buttons and hangers, etc. A large chunk of the Indian textile industry strongly believes that we must reduce our dependency on China, and India should increase the production of similar products which are being offered by China and also control costs accompanied by quick delivery schedules.
Indian apparel manufacturers ready to insist on ‘Made in India’ trims
Despite the fact that Chinese trims are at least 30 per cent cost-effective as compared to Indian trims, majority of Indian apparel manufacturers are ready to use ‘Made in India’ trims. While discussing the same with Apparel Resources, manufacturers shared that low cost is important, but is not the only reason for the use of Chinese trims. Sometimes, it is due to the nominated Chinese trims company by the brand and retailer. The availability of the particularly required trims in Indian market is also an issue. The apprehension is true whether India will be able to give Chinese price and quick delivery, as margins are already very thin, and in future, whether buyers will insist to reduce costing or at least give products in the previous costing.
Raja M. Shanmugham, President, Tirupur Exporters Association (TEA), highlighted a good point here, “Regarding the trims dependency, India has a long way to go to ensure our self-reliance. India doesn’t have any road map so far to achieve the same, and we need to prepare it on a reality basis.”
It is pertinent to mention here there is no strong association or trade body at the national level in India, raising the voice for trims manufacturers or lobbying for them or supporting them by taking any collaborative efforts.
Vimal Shah, Director, Goodwill Impex, Jaipur, underlined, “Chinese trims companies produce for countries across the globe, while India mainly produces for the country itself, so I don’t think that Indian companies can ever match the costing of China. And buyers may shift the orders to other countries even for a minor difference in cost, so Indian trims companies have to work hard.” Goodwill Impex produces a variety of apparels and export to various countries.
Nomination should not be a big issue now
There are cases where ‘Made in India’ trims are available, but the apparel export industry is dependent on China for several inputs because as per the buyers’ nomination, these have to be imported. However, the industry believes that now sentiments are changing with most of the countries being against China and India is focusing to improve its trims manufacturing. Indian Government is actively supporting Atmanirbhar Bharat Abhiyan (self-reliant India campaign) and it will be comparatively easier to convey the brands/buyers not to push for Chinese trims.
Exporters believe that since US, Japan, UK and Australia don’t have good relations with China, buyers from these countries should not push more for Chinese trims.
Opportunity for Indian trims manufacturers
Trims manufacturers across the country strongly feel that this is an opportunity for them, as not only sentiments are against China, the change is the need of the hour too. Good trims companies are further improving on multi fronts.
“With the all-time changing scenario, Indian trims manufacturing industry needs to evolve a bit faster. Considering the scale, quality and dedication, we have a huge possibility to reach most of the global audience through digital routes despite the current uncertainty,” said Piyush Jain, Director, Sharman Udyog Pvt Ltd. It is a more than 5-decade-old company and a recognised name in the apparel industry. In their endeavour to be in sync with the current times, Sharman Udyog recently introduced a digital sales and virtual presentation platform for domestic and international clients, receiving an overwhelming response. He also added that India’s story of self-dependency in PPE and mask manufacturing is a good example in this regard. Sharman Udyog offers a large variety of brand identification products like woven labels, hangtags and tag seals, buttons, tapes, etc. Their products are the result of an exclusive effort based on the specific needs of their customers.
Apart from huge import from China, some Indian trims manufacturers have their factories in China. Meerut-based Olympic Zippers is also one of them and the Chinese operations of the company are smoothly continuing. Mayank A. Gupta, Managing Director of the company, is highly positive and believes that India will strongly emerge as a good accessories manufacturing country. Aggressive support by the UP State Government to the garment industry is also the main reason for his positivity. “So far the majority of trims manufacturers were not keen to do heavy capital investment, but now when things are changing, such investments will take place. It will also increase product developments across the value chain,” he said.
Mayank, who is offering a large variety of zippers, gave an example of the manufacturing of waterproof zippers. So far, India is not much known for these zippers and these are being imported from China. “If Government policies really work on the ground level, such products will be easily manufactured in India,” he added.
It must be mentioned here that India has to focus on the availability of raw material also. Just adding value in imported raw material will not be sufficient. And looking at the past record of Indian trims manufacturing, not even a single big Indian company has entered in trims manufacturing. While on the other hand, dozens of Chinese companies are entering India every year, participating in Indian sourcing events to tap new customers, to encash upon the opportunities available in the country.
The issue is not only infrastructure, individual’s willpower or Government support. Indian trims manufacturers have to work on all fronts simultaneously, right from labour availability to ethical practices, fair competition, etc. Only then will trims manufacturing be possible in the long run.
As far as importers and traders are concerned, they are worried about their business, as they agree that everyone is strongly against Chinese products and are looking for an alternate solution. “Currently, there is no big challenge in this regard, as the overall market is already under pressure. With the upcoming development, we will also explore new options in the same business in future,” says a Tirupur-based leading importer of Chinese trims who doesn’t wish to be quoted.
Exploring Bangladesh could be a good option
Till the time India becomes self-reliant in accessories manufacturing, exploring Bangladesh seems like a good option. Bangladesh has a lot of leading accessories manufacturers who produce most of the trims under one roof and they follow all compliance and quality parameters. However, it is at the discretion of the brands, so apparel manufacturers cannot take a call on it.
It is worth highlighting here that before the outbreak of the COVID-19 pandemic, majority of trims manufacturing companies in Bangladesh were planning to expand and focus more on sustainability, as they had huge orders from Bangladeshi RMG exporters.
Indian apparel exporters believe that when it comes to the matter of importing trims, it is again at the discretion of buyers and brands, so they cannot decide if the trims will be imported from China or Bangladesh.
India is a buyer-driven market and Indian apparel exporters are, indeed, used to follow buyers’ instructions completely. The overall business scenario, international trade relations, Government policies and market sentiments are changing very fast and are quite unpredictable, so irrespective of all things, it is best to become self-reliant. India should also work in the same direction with full enthusiasm and all stakeholders must work collectively and support each other.