New garment companies turn to India as lockdowns hit China output

BUSINESS DESK: New garment buyers from the Czech Republic, Egypt, Greece, Jordan, Mexico, Spain, Turkey, Panama and South Africa among others have started negotiating with Indian companies to replace purchases from China.

The extended Covid lockdowns in China have restricted supplies, forcing buyers to look for other options to diversify risks.

“Sotoreves SL, a Spanish garment company, wants 1 lakh pieces of tie and dye and printed shirts. Negotiations have started with them,” said Lalit Thukral, president of Noida Apparel Export Cluster.

Another buyer from South Africa, Lizzard Pty, which has 180 stores, wants to buy women’s clothing, he said, while a buyer from Greece wants men’s garments.

The Noida Apparel Export Cluster has 3,000 units with an annual turnover of ₹35,000 crore and employs around 9,00,000 people.

China eased Covid restrictions in Shanghai after two months of lockdown on Tuesday, but the country’s “zero Covid” policy continues and nearly 650,000 will remain confined to their homes.

“The buyers still see uncertainty in China,” Thukral said.

The entry of new buyers at Noida export cluster has also raised hopes for the Tirupur garment manufacturers.

“We are the largest manufacturer of knitwear apparel in India. If they come to Noida, they will also come to us,” said Raja Shanmugam, president, Tirupur Exporters Association (TEA).

“The only concern is the rising cotton prices, which may impact delivery of goods within the stipulated time frame.”

India recorded its highest-ever textiles and apparel exports in FY22 at $44.4 billion, a rise of 41% compared to FY21.

The USA was the top export destination for the country’s textiles and apparel shipments accounting for 27% share, followed by the European Union (18%), Bangladesh (12%) and UAE (6%).

Export of ready-made garments stood at $16 billion showing a growth of 31% over FY21.

However, the high cotton prices are dampening the export opportunity that has opened up for Indian manufacturers.

Narendra Goenka, chairman, Apparel Export Promotion Council said, “China plus one strategy would have worked much better had the cotton and yarn prices would have been less.” (The Economic Times)