International Sourcing in an Apparel Industry

Topics: India, Economy of India, Cotton Pages: 4 (1313 words) Published: May 8, 2013



India ranks among the top target countries for any company sourcing textiles and apparel. The country not only offers a holistic supply chain, from a vast raw materiall suppy to high quality finished products, it also offers labour at low cost. Further, textile industry in India is a highly versatile sector, with smaller firms providing flexibility needed for smaller orders, the larger firms have the capacity to service the world’s biggest buyers. The Government of India has also undertaken several favourable policy intiatives, which has resulted in the growth of the sector as well. India offers several other unique advantages. Some of these are as follows: * Indian economy registering a growth of more than 6 per cent * Third largest producer of cotton yarn

* Second largest producer of cellulosic fabric/yarn
* Second largest producer of silk
* Fourth largest producer of synthetic fibre/yarn
* Cultural comfort with the US
* Strong entrepreneurial class
* Compliant garment manufacturing units

The textile and apparel industry is undergoing structural changes to sustain itself in a dynamic environment. Till few years back, companies were focusing on organic growth to increase sales but in the face of increased competition, companies have now started to focus on growth through mergers and acquisitions. Inorganic growth enables companies to access new markets, enhance product portfolio, and achieve value chain integration in a shorter span of time.

In developed economies, value retailers, who provide products that represent value for money proposition, have grown in the period 2005-10 at an average CAGR of 17% while brands have barely grown at an average CAGR of 2% in the same period. It is expected that going forward, the trend will grow stronger as consumers...
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