Vivek Ramachandran is the Chief Executive Officer of Serai, the digital B2B platform by HSBC that makes global trade easier for apparel businesses. Before Serai, Vivek was the Global Head of Growth & Innovation for HSBC Commercial Banking. He was responsible for coordinating key strategic growth initiatives, exploring new business models and driving the adoption of new technologies.
COVID-19 forced the textile industry in India to undertake a hard reset, and Indian manufacturers have needed to take swift action to stay relevant and capitalise on new opportunities.
Factors driving future growth of textiles
The pandemic brought about many setbacks in supply chains. Companies found it hard to source for raw materials. Factories shut down due to lockdowns, trade or travel bans. Demand was uncertain.
However, with economies opening up, growth is back on the agenda. Indian manufacturers must respond to key changes to build competitive advantage. There are several factors that can empower the growth of the Indian textile and apparel industry.
Emerging technologies: Digitisation can streamline areas such as manufacturing and supply chains. Supply chain traceability or visibility solutions, for example, can help companies map out or gain in-depth knowledge into their global supply chain they never had before. These insights can help companies mitigate risks, while achieving transparency and trust in their supply chains.
Technology also enables manufacturers and retailers to build relationships without the need for physical travel. B2B tech-enabled platforms have started to become a critical channel for sales and marketing. They open up a world of opportunities. These Platforms allow buyers and suppliers to connect with each other directly, and not be limited by geography. Buyers can search for suppliers and manufacturers who can cater to their specific requirements or Minimum Order Quantities (MOQs). This helps accelerate the buying cycle, saving them time and cost.
Strong government support: Integrated textile parks have an important role to play as they provide manufacturers with the right infrastructure to succeed. Within four years, 22 out of 59 textile parks have been set up under the Scheme for Integrated Textile Parks (SITP). The Union Budget 2021 also announced a scheme for seven Mega-Integrated Textile Region and Apparel (MITRA) parks to be established within the next three years as part of its continuous efforts to position India as a competitive manufacturing and exporting hub.
The proposed Free Trade Agreements (FTAs) with the UK and the EU are likely to offer further impetus to Indian exporters. Lower duties in these vital markets can offer competitive wage and tariff advantages to Indian textiles compared to other countries such as Bangladesh.
Evolving consumer habits and preferences: The pandemic has brought about a radical change in the expectations and demands of both Indian and global consumers. Health and wellness have been in the forefront, guiding preferences and buying patterns. A recent example would be the rise in popularity in fibre properties such as antimicrobials. Then, there’s also the demand for PPE suits, including face masks and gloves. Manufacturers that are more agile are well positioned to capture these new opportunities for growth and success.
The future of the Indian textiles industry looks promising. Companies have all the tools they need to overcome the hurdles posed by the pandemic. However, there needs to be a shift in mindset – particularly the small and medium-sized companies – to fully embrace digitisation. Many of these businesses are still used to traditional methods of working or may not have the necessary knowledge to adopt technology. Collaborations between the government, industry association, and corporations could help develop a more strategic and hands-on approach in helping MSMEs upskill. Ultimately, it’s important for companies of all sizes to understand that digitisation need not be an expensive or complicated process. Increased innovation across the board will be the edge India needs to truly be a global leader in this space.