India’s fraying garment industry needs a stitch in time under Modi 3.0

Until then, China dominated garment exports to western markets, commanding a 40% market share in both the EU and the US.

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However, according to the chief purchasing managers, there were growing headwinds: labour shortage in China’s coastal industrial hubs, rising wages and diversion of production capacity toward national consumption. About 54% of purchasing managers said that they would diversify up to 10% of sourcing away from China while 32% said they would diversify more than 10% of sourcing, McKinsey reported. A clear winner emerged—Bangladesh, which McKinsey deemed the “next China” in garment-making and exports.

Looking back at the survey, which was conducted 13 years ago at a time when global supply chains were getting further embedded in Asia, one statistic is revealing. When asked about the new sourcing hotspots in the next five years, 89% said Bangladesh, followed by Vietnam, Indonesia and Cambodia. India did not have the confidence of global purchasing managers; in hindsight, they were prescient.Early this year, the New Delhi-based research group Global Trade Research Initiative (GTRI) reported that India's global market share in garment trade has declined between 2015 and 2023: share of knitted apparel dropped from 3.85% to 3.10%, and the share of non-knitted apparel dropped from 4.6% to 3.7%.