Weaving richer success for India’s apparel sector

India’s domestic textile and apparel market is estimated to be $180 billion and growing at 9-10%.

- Rahul Jain is India head, BCG, and Namit Puriis Asia-Pacific leader (Consumer Practice), BCG.

India is the second largest producer of cotton globally (5 million metric tons) and has the second largest spinning capacity in the world (60 million-plus spindles). Yet, one might argue that India has not fully seized the opportunity. Despite employing over 45 million people and producing an estimated 22 billion garments annually, exports have remained broadly stagnant at around $37 billion for nearly a decade, even as competing sourcing hubs have steadily gained share. Why do we not hear about the Ludhiana or Tiruppur clusters in the same breath as we do about similar clusters in other categories where India is making some very decisive moves?

Tariffs, global supply chain realignments and reconfiguration offer a unique opportunity for the industry which we believe is ata crossroads. India largely focuses on upstream play, which hasa significantly lower return on capital. This is driven by fragmented players, with nearly 10 companies whose revenues exceed $500 million. The government has proactively supported the sector through policy and reforms. So, the question is what must companies do?