INSIDE LOOK: The Good, Bad and Ugly of India as Sourcing Hub

The apparel sourcing experience in India is entirely a function of the kind of product one is procuring, and knowing where to get it from. A mismatch can lead to a total washout of the order, while knowledge and experience could totally alter that exercise.

Long Story, Cut Short
  • Except for some large export groups, India lacks scale in mills, production and washing units, and low labour productivity.
  • Shirts that get made 16 pieces a day per machine in Bangladesh totes up to only 10 in India.
  • India is a delight as a sourcing centre when it comes to small runs of 200-2000 pieces in value-added garments—all in the unstructured category.
The movement in apparel manufacturing in India is towards a proliferation of small and medium-sized units—10 machines to 200 machines, rather than the 500–2000 machine production units one sees in Bangladesh, Vietnam, Indonesia.
Missing Scale The movement in apparel manufacturing in India is towards a proliferation of small and medium-sized units—10 machines to 200 machines, rather than the 500–2000 machine production units one sees in Bangladesh, Vietnam, Indonesia. Pierre Bamin / Unsplash

India being a vast country with several apparel sourcing clusters presents a very mixed picture in sourcing. One’s experience depends on the product and market being catered to and the ability to find the right cluster. Or else, things can go downhill pretty fast.

I have been sourcing apparel for the past 24 years now, of which 12 years were for a liaison office and thereafter on my own as a buying agency. The Quota years took me to Nepal, Maldives, Kenya, Kuwait, Bahrain and Madagascar, all of which faded as the quotas went, while Bangladesh, India, Sri Lanka, Vietnam and Indonesia have been constant.

Most of my business was and still is large runs in menswear for discounters in the US and Mexico: Target, Walmart, Ross, Sam’s Club, Steinmart, Shopko, Coppel, Liverpool, Dorians and the rare windfall of a Costco order. In this business I burnt my fingers long ago in India and don’t even attempt to pursue it here. As in the earlier years and even in 2020–21, the story is the same.

MSMEs not equipped for largescale production 

If I order 48,000 men’s washed chinos for a 75-day delivery and come the date, nothing is ready! Inspections start 90th day onwards, are done for some eight shipments over two months, with endless exchanges on fabric, colour-matching, brand compliance failures and at the end: huge shortages. The same product in Bangladesh I get 20% cheaper, and using China fabric, which means three weeks to be factored in for ocean transit, and it still is shipped before needed deadline of 75 days in mostly one inspection and no compliance failures.

Every submit is delayed—from fabric, colour dips, strikeoffs, fabric readiness, commencement of production to actual production run. A lot of time gets lost because of poor financial condition of manufacturers, due to which they delay inordinately in mill payments, causing the mills to slow down the fabric delivery. Not that the mills produce in time themselves.

These unplanned delays mean no production plan can be adhered to. I have so often witnessed makers delaying a month in fabric pick-up and then sending by air the garments pre-paid to the US! I have also seen how, due to all these variables, there are months when all production comes together, the manufacturer will then run here and there for outsourcing and that has a major impact on quality, profitability and timelines; these will be followed by a month of an idling factory, which again is a huge loss due to the fixed overheads.

To sum up, the main reason is lack of scale in mills, production and washing units and low labour productivity; the same shirts get made 16 pieces a day per machine in Bangladesh versus 10 in India. Hence, with the exception of a few large export groups, one’s sourcing experience in large runs is not very encouraging in India. Perhaps this the reason why largescale bulk production has not moved to India.

Added to this is the absolute lack of production facilities for exports in ladies intimatewear, swimwear, tailored pants and jackets/blazers, outwerwear and skiwear, fine gauge sweaters and good quality heavy, matte synthetic fabrics with Lycra. One can count the export units on your fingertips. This makes the country miss out on a large chunk of the sourcing pie. There are many medium sized units who do make the categories mentioned above, however they cater only to the domestic market.

The figures speak for themselves. See Table 1 below:

The growth disparity is evident, and it is pretty embarrassing as India is one of the world’s largest suppliers of cotton, polyster and viscose fibre, and the industry took off here 20 years before the listed countries.

Table 1 : Sourcing of apparel from India and competitors
(Apparel Exports Billion $US)
YEAR India Bangladesh Vietnam
I991 8 2 1
2021 16 37 25
Growth 50% 1250% 2300%
Notes:
  • Sri Lanka and Pakistan apparel exports are too small to compete.
  • China is not listed as it is way too big.

If I order 48,000 men’s washed chinos for a 75-day delivery and come the date, nothing is ready! Inspections start 90th day onwards, are done for some eight shipments over two months, with endless exchanges on fabric, colour-matching, brand compliance failures and at the end: huge shortages. The same product in Bangladesh I get 20% cheaper, and using China fabric, which means three weeks to be factored in for ocean transit, and it still is shipped before needed deadline of 75 days in mostly one inspection and no compliance failures.

A lot of time gets lost because of poor financial condition of manufacturers, due to which they delay inordinately in mill payments, causing the mills to slow down the fabric delivery. Not that the mills produce in time themselves.
More Than a Stitch in Time A lot of time gets lost because of poor financial condition of manufacturers, due to which they delay inordinately in mill payments, causing the mills to slow down the fabric delivery. Not that the mills produce in time themselves. Alexander Andrews / Unsplash

Value-added Strengths

On the other hand, my experience is very different when it comes to small runs of 200–2000 pieces in value-added garments: hand-embellished ladieswear, printed garments, garment-dyed and specialty-washed clothing, leather clothing and childrenswear—all in the unstructured category. India is then a delight as a sourcing centre: the sheer flexibility in fabric, pattern and colour, the very low minimum in fabric and garment production—even 100 metres is feasible; the ability to change silhouette, fit and detailing till the last minute, the design talent in fabric and embellishment, the comfort of the makers in doing small runs, the beauty of the handwork, the wonder plus comfort of a heritage in textiles and the sampling ability—buyers sit in the factory showroom and samples in optional cuts are made on the spot to choose from. These items are mostly not so timebound and compliance checks are not needed in the way the sourcing is done. Nowhere in the world can anyone do this category of apparel. This is the business I see growing in India for exports, and the domestic market too.

The above two parts: Bulk runs in good quality basics and value-added small runs also are not consistent throughout the country. Bangalore, Tirrupur, Coimbatore and Chennai are more geared towards medium to large runs (with attendant issues as pointed out earlier), while the National Capital Region, Jaipur, Indore, Ludhiana are more suited for the smaller value-added runs. If you try to source a hand-spangled tie-dye print tweens knit bustier in Tirrupur, it cannot really be done. Of course, there are exceptions, but what I have shared is entirely my experience.

A Question of Ethics

Another problematic issue in India is lack of accountability—many manufacturers delay beyond measure but will choose to cancel rather than air at own cost. Others make (knowing it is) very shoddy quality, and yet will argue about inspection failures and refuse to pay penalties. Honesty could also frankly be more—Indian manufacturers are known for just not paying commissions due and for procuring inferior inputs at much lesser costs than that paid for by the buyer in the price.

Work ethic is another issue. Long absenteeism for personal and religious reasons, one never sees this in the Far East. Ethics too pose a huge issue; many a times the manufacturers strive to work directly with the buyer and it mostly ends in disaster for both.

I have seen in the past five years that the movement in apparel manufacturing in India is hence towards a proliferation of small and medium-sized units—10 machines to 200 machines, rather than the 500–2000 machine production units one sees in Bangladesh, Vietnam, Indonesia. Needless to say, these small-to-medium units are not geared for compliance requirements of the large international retailers and neither for large volume export orders. The ability in product type is also very constrained, being mainly unstructured wear.

Hence in conclusion, apparel sourcing experience in India is entirely a function of the kind of product one is procuring, and knowing where to get it from. A mismatch can lead to a total washout of the order, while knowledge and experience of the same can make it a pleasant experience. There is no pattern or formula one can use, unlike as in other apparel production countries.

Another problematic issue in India is lack of accountability—many manufacturers delay beyond measure but will choose to cancel rather than air at own cost. Others make (knowing it is) very shoddy quality, and yet will argue about inspection failures and refuse to pay penalties. Honesty could also frankly be more—Indian manufacturers are known for just not paying commissions due and for procuring inferior inputs at much lesser costs than that paid for by the buyer in the price.

 
 
  • Dated posted April 21, 2022
  • Last modified April 23, 2022