Australian labels seeking to source product from India have always enjoyed a love/hate relationship with the South Asian apparel powerhouse. But recent developments by the sector’s governing bodies mean the road ahead may be a lot less fraught, as Tracey Porter Reports.
By usual standards, married father-of-two Armi (Arminder) Channa ticks all the boxes when it comes to the measurement of success.
Having completed his formal education in the United States, the bearded entrepreneur owns $A690,000 worth of prime factory space in the Indian capital of New Delhi, is responsible for the livelihoods of anywhere between 100 and 250 staff, and counts European labels such as Roberto Cavalli, Kate Moss for Topshop and Belgium’s IKKS as clients.
No stranger to international travel, the 35-year-old also considers himself schooled when it comes to Western pop culture, as evidenced by the Kylie Minogue/Bollywood compilation CD playing in his late model four-wheel drive.
To seal the deal, he also shares the belief that the international cinematic smash Slumdog Millionaire, set in the country’s commerce hub of Mumbai, did more harm than good when attempting to dispel perceptions of India as a third world country.
Perhaps his greatest achievement is that with 15 years in the industry already behind him, Channa is typical of the young business men and women forming the new guard in India’s booming apparel sector.
Previously dominated by old-school textile merchants, young apparel entrepreneurs such as Channa have adopted a fresh approach to trade, looking outside India’s massive domestic market in an attempt to tackle China’s international manufacturing stranglehold head on.
Seeking to capitalise on their nation’s world’s best practice embroidery and embellishment reputation, the new wave of Indian garment producers has sought to initiate fresh thinking when it comes to apparel production by making the sector much more appealing to a global audience.
Drawing on the west’s demand for greater transparency within the apparel supply chain, Indian manufacturers have worked hard at reducing lead times and improving product quality. In addition, they are liasing closely with the Indian government to ensure stricter rules governing such issues as child labour and workplace compliance are adhered to.
The move towards greater corporate and social responsibility has resulted in international retail brands increasing their presence in the subcontinent, with global fashion giants Macys, Esprit, Gap, H&M, Marks and Spencer, Wal-Mart, Adidas and JC Penney already boasting established sourcing offices in India.
Australian chains too have noted the changes, with retail conglomerates such as Kmart, Target, Myer, The Just Group, catalogue company Ezi-Buy and listed retailer Country Road also sourcing from or producing in India.
Drawn by the amazing artisans, high quality product and opportunities to live in and work alongside the manufacturers during production of their new season collections, high-end Australasian labels such as Queensland’s Easton Pearson, Western Australia’s Aurelio Costarella and New Zealand’s Trelise Cooper have also turned to India to get some if not all of their ranges made.
But that says more about the offshore designers’ willingness to engage than it does the Indians’ attempts to diversify.
While traditionally Indian manufacturers have targeted the lucrative Europe and US markets to ply their wares, the global recession combined with the fluctuating Indian rupee has forced them to look further afield in terms of potential export markets.
Indian Apparel Export Promotion Council (AEPC) secretary general Vimal Kirti Singh admits the country’s reliance on these two markets has led to missed opportunities elsewhere.
“Our dependence on the European Union and the United States is not the right way to go,” he says. “There are more than 190 countries in the world and we know what we have to do to compete.”
Australia imports around $A7.1 billion in textile and clothing products annually. Of this, India provides just 3.2 per cent.
“If we could get even 10 per cent of the Australian market then we would need to triple our exports there,” Singh says. But the road ahead will not be easy.
AEPC chairman Rakeesh Vaid concedes that in the past, some Australians may have had good reason to be wary of manufacturing in or sourcing product from India. Without the benefit of an intermediary sourcing agent, many brands that sought to produce in India found themselves burned by late deliveries and poor workmanship. Communication difficulties only compounded the problem.
“Indians can’t say no,” Vaid says. “The average person doesn’t know much about India and there is a general lack of awareness about what we are capable of because there has been no sustained campaigning. Where we have lacked is marketing.”
To help overturn the knowledge deficit and re-acquaint Australians with what the Indian textile and apparel industry has to offer, the Indian Ministry of Textiles, with the assistance of groups such as AEPC, the Cotton Textiles Export Promotion Council (Texprocil) and the Synthetic & Rayon Textiles Export Promotion Council, will next month stage two exhibitions showcasing Indian product.
Taking place in both Melbourne (November 12 and 13) and Sydney (November 16 and 17), the ‘Brand India’ fair will feature a selection of cotton, silk, wool and man-made fibre textile producers as well as fashion apparel and homewares suppliers.
In all, more than 60 different manufacturers will make the 14-hour flight south, including accessories specialist SK International, fabric suppliers Divya Textiles and KG Denim, along with Alok Industries, which counts yarn dyeing, fabric designing, sampling, circular knitting, weaving, processing, embroidery and garment producing among its offering.
Talks are continuing with India’s best known retail and wholesale suiting brand, Raymond, one of the world’s largest consumers of Australian merino, with hopes the group will help spearhead the charge.
It is hoped the free trade event, which will also see catwalk shows and panel discussions, will also appeal to a consumer audience with Project Runway Australia series one winner Juli Grbac lending her support.
The newly-married designer will make her second trek to India later this month to work alongside Channa’s Zephyr Apparels group and two other factories based in the country’s north – Outlook Group and RNR International – to produce a 15-piece collection to showcase at the fairs.
Australia is the fifth stop on the India textile and clothing trade fair calendar, with South Africa, Japan, Brazil and Argentina all staging similar events.
Singh says the Indians are investing several million dollars to ensure the success of the Australian arm of its marketing drive.
“Our investment is a lot of time and a lot of energy,” he says. “We are targeting not only mass market buyers and producers, we are targeting also high-end, homewares, fashion and other industries that use our raw materials.”
Singh says the effort will only be worthwhile if the group can build momentum and suggests a five-year period would afford enough time to give Australians the chance to enjoy the Indian offering.
“We have a huge gap from what Australia buys and what India is selling to Australia. We can bridge the gap and we can be the China plus one because we know 90 per cent of imported product is bought from China. We can be the one to fill in the gap.”
Singh acknowledges there are still some hurdles that must be overcome if the two markets are to work side by side.
“We have challenges. We have challenges in pricing, we have challenges in delivery and we have challenges in quality.
“I am confident we can overcome these challenges. There is a mindset on China. We will change that, that’s why we are [staging the exhibition]. I am sure India, with the versatility we have, we can do a good job of that.” But it’s not just a one-way street.
Singh says there is also a gap in the market for Australian manufacturers to come to India. “India is a huge consumer market in itself. Australian designers and Australian manufacturers can also come to India and sell a lot because this is a big market opening up.
“We want Australians to come to India, enjoy the Indian weather, enjoy the Indian food, enjoy the Indian textiles and enjoy the Indian people.”
ARTISANS AT WORK: Indian apparel houses specialise in hand-made embellishments. Here Indian artisans sew on individual beads.
At a glance
• India has a population of 1.17 billion people, ranking it the second most populous country in the world behind China.
• In 2008/09 India’s textile and apparel industry was worth $US55 billion ($A63 billion). By 2012 it will grow to an estimated $US115 billion ($A132 billion).
• The Indian textile industry provides 35 million workers with jobs directly and a further 47 million indirectly, making it the country’s largest employment provider behind agriculture. A further 17 million jobs will be created in the sector in the next three years.
• Indian textiles are exported to more than 100 countries, with the US the country’s largest cotton textile trading partner, accounting for 22 per cent of total textile and clothing exports. Bangladesh is next with six per cent and Germany third with five per cent.
• India is the second-largest producer of cotton in the world, accounting for around 20 per cent of global production. It is also the second-largest producer of silk, accounting for 18 per cent of total raw silk production.
• India has 33 million spindles from which to produce yarn, confirming it as the world’s second largest yarn producer behind China.
• India’s textile industry represents 26 per cent of the manufacturing sector and adds 15 per cent to India’s gross export earnings and four per cent to the national GDP.
Sources: Texprocil, Textile World Asia and the Indian Apparel Export Promotion Council.