A PROJECT REPORT ON

APPAREL INDUSTRY

SUBMITTED TO: SUBMITTED BY:

MS. GARIMA TOMAR FATEH KHAN A1802009423

PADMINI CHETIA A1802009413

AMRIT MISHRA A1802009398

ANKIT MOUR A180200961

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INDEXS.N0. PAGE NO.

1. INDUSTRY OVERVIEW………………………………………………………………………………. 3.

2. PRODUCTION CENTRES…………………………………………………………………………… 5.

3. DOMESTIC INDUSTRY…………………………………………………………………………………………. 8.

4. MAJOR EXPORT DESTINATIONS…………………………………………………………………………. 9. 5. EXPORT TRENDS………………………………………………………………………………………………… 10.

6. MAJOR COMPETITORS IN WORLD……………………………………………………………………… 11.

7. PROVISIONS IN INDIA’S FTP………………………………………………………………………………. 13.

8. QUALITY STANDARDS……………………………………………………………………………………….. 14.

9. PROBLEMS FACED BY EXPORTERS……………………………………………………………………. 15.

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1. APPAREL INDUSTRY (Overview)

India is the second largest manufacturer of garments after China, which is the global leader in garment production. India is known for its high quality garments for men. Most of the garment manufacturers in the country are in the Small and Medium scale industry.

India has an advantage in producing garments & it produces and exports garments at economical prices due to the cheap labor rates.Also technological advancement & use of sophisticated machinery has enabled the manufacturers to achieve better quality and make well designed garments.

The country is booming with fashion and lifestyle, with the organized retail trade growing at a rate of 30% per annum. The Indian apparel or Indian garment industry is pegged at more than 90,000 crores with nearly 13% growth per annum. The men's garment or clothing segment constitutes nearly 45 % of the total apparel market and growing at a constant rate each year. The share of organized branded segmet is fast increasing in the Indian apparel market.

is the second most preferred country after China for textile and apparel sourcing. Its Apparel industry is likely to achieve an export target of US$ 25 billion by 2010-11.

Some of the major factors for the rise in India are :

Vast sources of raw materials.

Low labor costs.

Entrepreneurship and design skills of the Indian trader.

Changes in the policies to open up Indian economy to the outside world.

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India's natural leverages that the industry uses to its full advantage -

India the largest producer of jute

the second largest producer of cotton

the third largest producer of raw cotton

the fourth largest producer of synthetic fiber

Globally Apparel Industry is one of the most important sectors of the economy in terms of investment, revenue, and Trade and employment generation all over the world

Some of the important segments of the apparel industry include kids clothing, men’s clothing, clothing for women, bridal ware, men’s wedding ware and intimate apparel

3 major channels of sales are

–Brick and Mortar

–Catalog

–Internet

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2. PRODUCTION CENTRES

The major production hubs exclusively for exports are:-

–Delhi

–Mumbai

–Tirupur

–Bangalore

–Chennai

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Some of the major production centers of knitting yarns and garments in India are as follows:

Tirupur Ludhiana Himachal Pradesh

Tirupur

Tirupur located 55 km to the east of Coimbatore city in Tamil Nadu is known as the hosiery capital of India. It accounts for 90% of India's cotton knitwear export which is worth an estimated Rs 4,000 crores. In spite of being severely handicapped by poor infrastructure. Tirupur has a unique significant presence at the lower end of the international knitwear and hosiery market. Local market of Tirupur is around 800 crore Indian rupees. There are more than 2500 apparel manufacturing units and 750 dyeing units in the city. Tirupur also has 300 printing units, 100 embroidery units and 200 other units like compacting, raising and calendaring units. Market of Tirupur is around Rs 8500 crores and local market is about 1500 crores according to a recent report. Every year, millions of pieces of underwear come out of Tirupur. Tirupur's hosiery factories are profitable successes and are considered as small jewels in India's economy.Tirupur is one of the largest source of Foreign Exchange for the country because of its exports. This city is famous for the export of all Knit wears like T-Shirts, Polo - Shirts, Sweat Shirts, Banyans, Pajamas & Night Dresses on various fabrics like Single Jersey, Interlock, Fleece, Polar Fleece, Drop Needle, Pique Jersey, Pointelle Jersey, Pointelle RIB, RIB, etc. The hosiery and knitwear business in this city has long been held out as a model for the export-led growth path.

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Ludhiana

It is also known as the "Manchester of India", Ludhiana in the State of Punjab is a big center for knitwear production. Ludhiana started its first hosiery unit in the beginning of 20th century and today the city boasts of housing more than 6000 small to medium size knitwear factories, 10 big hosiery yarns mills, about 150 small to medium size worsted and some woolen yarn factories, about 120 yarn and fabric dyeing factories, besides manufacturers of knitting machines, stitching machines, knitting needles, labels and packaging materials. About one third of the population of the city is engaged in the knitwear business, directly and indirectly.Ludhiana makes an hosiery turn over of approximately US$ 40 million annually with exports equivalent to 30 percent of its production. The countries to which exports are mainly are Europe, USA and Middle East countries.

Himachal Pradesh

Himachal Pradesh has a long tradition of hand knitting. There are various small scale knitting mills in Himachal Pradesh. Baddi and Nalagarh are two important towns in the state.Himachal Pradesh is exempted from paying income tax and central excise duties for 10 years and there are concessions in sales tax.

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3. Domestic Industry

The Indian Domestic apparel market is pegged at between Rs 120-150 million

Major players in Indian garment market

–Pantaloon

–Shoppers Stop

–TATA

–Globus stores

–Arvind Brands

–Madura Garments

–Wills Lifestyle

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4. MAJOR EXPORT DESTINATIONS

The provisional figures released by AEPC showed that India exported garments worth $10.13 billion during 2008-09, as compared $9.68 billion, registering 4.6% growth over last year. The export figures in terms of Indian Rupee showed better performance, inasmuch as our exports work out to Rs.46,628 crore for 2008-09, up 19.55% from Rs.39,002 crore for 2007-08. The full year performance saw both small surges and slides, depending upon primarily the value of Indian Rupee as compared to US Dollar, which essentially decides how competitive we are in the world garment market. This further need to be read in the context of level of demand for garments in all important export destinations, have gone down.

The US and the EU together account for more than 80% of Indian garment export

The UAE and Saudi Arabia are the other major export destinations.

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5. Exports from India for last 3 years

2007-2008:USD 9.7bn

2008-2009:USD 10.13bn

2009-2010:USD 10.64bn

India exported garments worth $10.13 billion during 2008-09, as compared $9.68 billion, registering 4.6% growth over last year. The export figures in terms of Indian Rupee showed better performance, inasmuch as our exports work out to Rs.46,628 crore for 2008-09, up 19.55% from Rs.39,002 crore for 2007-08.

2007-08 2008-09 2009-20109.2

9.4

9.6

9.8

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10.2

10.4

10.6

10.8

Export Trends

Export Trends

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6. Major Competitors in the global Market

The factors which are very much concerned for considering competition in the apparel industry are :

Price wars between rivals

Offering heavy discounts or clearance sale by the direct competitors'.

Offering best customer services by the competitors (availability of new/ up-to-date fashionable products)

Changing fashion trends, style detailing and patterns

Introducing new fabrics, designs, unbeatable prices and accessories

Obtaining certifications by the factories for obtaining orders (Oekotex, ISO)

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The major competitors are :

China

Bangladesh

Vietnam

Turkey

Mexico

European Union.

7. Provisions in India’s FTP

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Higher Support for Market and Product Diversification

–256 new products added under FPS–300 products from the RMG sector incentivized under MLFPS for further 6 months from October, 2010 to march, 2011 for exports to 27 EU countries–Market focus scheme introduced for the market diversification is continued

Support for Technological up-gradation

–Zero duty EPCG scheme–Additional Towns of Export Excellence (TEEs) announced in which Bhiwandi (Maharashtra) has been named for Textile

Procedural simplification and Reduction of Transaction Cost

–Flexibility to get a high value EPCG authorization by filing their EPCG application on Annual basis–a single customs notification for the two variants of Advance Authorization scheme namely advance authorization for physical exports & deemed exports shall be issued

Other

–Duty free import of specified trimmings, embellishment etc shall be available @ 3 per cent on exports of polyester made-ups in line with the facility available to sectors like Textiles & Leather–Readymade Garment sector granted enhanced support under MLFPS

8. Quality Standards

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For the textile and apparel industry, product quality is calculated in terms of :

–Quality and standard of fibers–Yarns–Fabric construction–Color fastness–Designs–Final finished garments

Quality control in terms of garment manufacturing, pre-sales and posts sales service, delivery, pricing, etc are essential for any garment manufacturer, trader or exporter

Major things to pay special attention for quality of apparel export

–Sewing defects–Color effects –Sizing defects–Garment defects

Quality Parameter

–Performance–Reliability–Durability–Visual & Perceived Quality

International Quality programs: ISO 9000

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9. Problems/ Challenges faced by Exporters

India’s focus is on High value clothing for which the demand has significantly decreased after recession

Competition from countries like Bangladesh and Vietnam who provide apparel at very low margins

Change in Buyer preferences, they have moved towards low cost retailers

Productivity in Indian garment factories is only 50% of the global standards

Disadvantage on the duty drawback front in comparison to China, Vietnam & Bangladesh

Fluctuations in the Exchange rates (Rupee appreciation is disadvantageous to exporter)