MUMBAI: India’s export story has always been one of great learning and debate, especially in the era of globalization where local manufacturers are constantly challenged by global manufacturing hubs having better access to technology and funds.
Despite that, India’s retail and lifestyle product companies are charting a growth trajectory in world exports that is unmatched by other countries in the Asia region backed by their ability to deliver superior quality products within tight timelines and adjust output in accordance with dynamic market conditions.
An analysis of sourcing data from DAMCO, India’s leading provider of freight forwarding and supply chain management services, for the period 2013 to 2016 indicates continued success for the Country.
“India outperforming China as the fastest growing geography from Asia for locallymade retail and lifestyle products with 10% CAGR growth over the last four years does not happen at random. Instead it lays testimony to improvements being made in the manufacturing process by local Indian suppliers to become more agile and offer the world high quality, superior design within shorter lead times at competitive costs. Now imagine, if we lower hidden trade costs by just 10%, we can further improve the Country’s competiveness and add additional revenues of US $ 5.5 billion annually,” says Mr. Vishal Sharma, CEO India, Bangladesh, Sri Lanka – DAMCO.
Home bedding & bath ahead of textile exports from India
While traditionally, the textile sector is known to be the largest contributor to India’s exports, DAMCO´s data shows that home bedding & bath, followed by home décor & furnishing actually lead India’s retail and lifestyle exports, with textiles coming in third place. Together, these three categories dominate the total volume of exports from India at 53% consolidating India’s position as a global hub for these products.
Footwear and stationary categories are also growing in popularity globally registering 43% and 36% CAGR respectively. Interestingly, demand for emerging categories like children’s toys, hand-tools, camping material and building stones & tiles from the Country is also on the rise.
Adds Vishal, “India based manufacturers are benefiting significantly from access to quality raw materials that are competitively priced. Their improving agility combined with the efforts of the government is making India an increasingly attractive destination for global brands, especially in the retail and lifestyle category.”
North India owns the largest share of exports while South India is growing the fastest
North India and the National Capital Region (NCR) own the largest share of worldwide exports at a whopping 33% since home décor, apparel and home, bath & bedding mainly originate from this region.
Uttar Pradesh and East India lead India’s exports to NAM, while in contrast, South India owns the largest share of exports to Europe.
Despite being much smaller in its volume of exports, South India has witnessed the highest CAGR growth @ 23% and dominates in footwear, babies garments, knitted or crocheted garments and other textiles.
Moving West, Gujarat & Rajasthan have witnessed strong improvement because of abundant availability of quality raw materials, State-level initiatives focused on skill development and conducive Government policy aimed at propelling exports from the two States.
A glimpse into the future
2017 holds new promise of further leveraging India’s competitive position in retail and lifestyle exports. While the local ndustry is ambitiously moving ahead to realize its global potential through improved processes and supply chain, the Government is also playing a significant role in propelling bilateral trade across geographies.
“With the additional support provided by Make-in-India, skill building and moving India up the ease of doing business Index, we can expect to see more India-made products going across to capture newer shores and break into newer categories. There is room for more growth,” says Vishal.
More so, with technology becoming omnipresent in every walk of life, and specifically in manufacturing, the next couple of years offer the potential of increased economic activity across India, in turn facilitating development across all strata of society and Industry.