Indian Apparels Sniff Opportunity to tie down Chinese Apparels

The Textile and Apparel Industry has been flourishing in China since 2009, the country has boasted about housing the manufacturing units of several International Brands. Needless to highlight the immense contribution of this industry to boost nation’s GDP.

However, the existing quagmire in the industry was unveiled when US announced restrictions on the import of Chinese products. The industry has been in the news for multitude of reasons, none putting it in a good light. Since COVID-19 outbreak and the subsequent impact on Chinese exports, some European countries have also banned the entry of Chinese product and other imposed high customs and sanctions due to the surfacing “human Rights Violation” on Chinese apparel companies.

The sector most impacted was the cotton industry which is majorly produced in the controversial region of Xinjiang. Xinjiang, also known as the “hometown of cotton”, is the main cotton producing area in China. According to the National Bureau of Statistics, Xinjiang’s cotton output in 2019 reached 5.02 million tons, accounting for 84.9 percent of China’s total output.

Following the tumultuous reports of the extreme human rights violations and possible genocidal practices against Uyghur population, the U.S. Customs and Border Protection (CBP) imposed import ban on the entire supply chain with regard to cotton – extending it to yarn, textiles and clothing, despite being fully aware of the repercussions of such a policy on its domestic industry. 

Citing the alleged existence of “forced labor” in Xinjiang, the Bureau has issued such bans on private companies and detaining related imports products. In total 11 companies were sanctioned for “Violation of Human rights On Uighurs of Xinjiang”, which majorly included textile companies. Some of the major blacklisted companies are : Changji Esquel Textile, of the Esquel Group, Hefei Bitland Information Technology Co. Ltd., Hefei Meiling Co. Ltd, Hetian Haolin Hair Accessories, Hetian Taida Apparel Co., Ltd., KTK Group, Nanjing Synergy Textiles Co. Ltd., Nanchang OFilm Tech, Tanyuan Technology Co. Ltd., Xinjiang Silk Road BGI, Beijing Liuhe BGI.  T

These blacklisted companies cannot buy components and parts from US companies without prior approval from the US Government. The US Customs authority has clearly stated that it “will not tolerate illegal, inhumane and exploitative practices of forced state-sponsored labour in the U.S. supply chain.” The said detention and release orders, which allow the U.S. Customs and Border Protection to detain goods and products suspected of forced labour, this move is a part of a longstanding U.S. law against human trafficking, child labour and other human rights violations.

According to the customs data of China, from January to July, 2020, China industry has shown a year on-year decrease of 16.68%, which can be complemented by the data from the National Bureau of Statistics, from January to July in 2020, the actual completed investment in China’s garment industry declined by 36.6% year on year.

The sanction of Chinese companies by US provides a huge opportunity for Indian garment manufacturers to gain significant foothold in global apparel industry as an alternative manufacturing base for China.  

India has traditionally been a big producer and consumer of cotton products. The growing consumerism and a flourishing middle class in India have increased the demand for branded fashion. The up market European and US brands are doing huge volumes in India, however most of the finished garments are either manufactured in Chinese factories in Southern and Eastern China or use Chinese fabrics which are sourced by garment finishing houses in other countries of Asia. The international furnishing brands such as IKEA has even introduced Indian cotton products in international market including China.

With Diwali around the corner, the Indian consumers, manufacturers and traders can give a strong impetus to Indian apparel Industry, and boycott any products made in China. The policy makers in India have already taken the first step in this direction, when they made it mandatory for the online retailers to display the country of origin of products on sale online. This is to enable Indian consumers an open assurance to choose Indian products over products made in hostile countries.