US fashion brands seek to scale up sourcing in India

A file photo of an apparel store in India. A delegation of 18 members of the American Chamber of Commerce in Hong Kong comprising sourcing heads of large apparel and footwear brands is on a three-day visit to India.alamy

Amid an ongoing trade war between China and the US, some of America’s top fashion brands met government officials in New Delhi on Tuesday to discuss more sourcing opportunities from India, while also pushing for a free trade agreement (FTA) between India and the US.

A delegation of 18 members of the American Chamber of Commerce in Hong Kong comprising sourcing heads of large apparel and footwear brands such as Carter’s Inc., Ralph Lauren Asia Pacific Ltd, Gap Inc., PVH Corp. (that owns brands such as Calvin Klein, Tommy Hilfiger and Arrow), and other large apparel sourcing companies—is on a three-day visit to India to discuss their expectations and the long-term benefits of sourcing from India.

The delegation met textiles minister Smriti Irani, textiles secretary Ravi Capoor, and NITI Aayog chief executive Amitabh Kant.

Although most of these brands have been sourcing from India for decades, their visit comes at a time when India is losing out on apparel exports to other Asian countries such as Bangladesh and Vietnam that score better in cost efficiencies. However, with an escalation in trade tensions between China and the US, India stands to gain.

“India is at a point of inflection today in the way supply chains are moving and manufacturing is moving away from China. India has an opportunity to get out and really compete on that front,” Tara Joseph, president, American Chamber of Commerce in Hong Kong, told reporters late Tuesday.

The executives discussed issues on sustainable sourcing, skilling of employees, sourcing of goods at scale, ease of doing business in India, and working on an FTA with the US for smoother flow of goods from India to other markets.

Joseph said brands and retailers could further spruce up investments in factories and work with their Indian partners. “The American brands that are thinking of coming in, are not looking for a few million dollars worth of investment or for a few years. “The large brands want to make substantial investments beyond a hundred million dollars and that’s for a long period of time,” she said.

“Fruitful interaction with textile, apparel & footwear delegation from the American Chamber of Commerce, Hong Kong. Wonderful to see their immense interest in sourcing from & investing in India,” Kant said in a tweet.

To be sure, India has been a key sourcing base for some of the world’s largest brands such as IKEA, Inditex, Hennes & Mauritz AB and Gap Inc.

The US and the European Union together comprise about 60% of India’s total apparel exports in terms of value, according to an April report by CARE Ratings. However, in the past decade, other low-cost markets in Asia such as Vietnam and Bangladesh have gained a bigger share of apparel and footwear sourcing. China, on the other hand, has been losing market share, the report said.