Kanti Prakash Brahma, Senior Consultant, Technopak Advisors
India and China are the two leading players in global textile production and exports. Both these countries are known for their capability of producing an extensive range of textile & apparel (T&A) products for the global market and for their reputation of meeting the quality and service expectations of the established fashion brands and retailers across the globe. The dominance of these two textile giants has forced economists, policymakers, industry players, and academicians to look deeply at these two countries textile industries and thus try to map them with respect to the changing dynamics of the global industry. This comparative analysis of the textile industries of India and China spans five broad dimensions viz. general country competitiveness, position in the global textiles and apparel exports market, industry-specific resource comparison, comparison of product baskets, and the future prospects of the (T&A) industry in the two countries.
India and China-with populations of 1.24 billion and 1.34 billion respectively-are frontrunners among emerging nations when comparing key economic indicators. China has surged ahead with a per capita GDP of $6,076 against Indias $1,492. Further, it contributes 14.9 per cent of the worlds total GDP (on a purchasing power parity basis) while India makes up a mere 5.6 per cent. China has also managed to gain a competitive edge over India in other crucial parameters including building public, social, and judicial institutions; developing such infrastructure as roads, quality electricity supply, etc.; investing in health and primary education; and ensuring higher labour market efficiency. India, on the other hand, has managed to outpace China in only a few indicators, eg. the development of its financial market, quality of management schools, etc. Chinas GDP is also expected to grow more rapidly, at 7 per cent, over the next five years; in comparison, a 6.2 per cent growth rate is the forecast for Indias GDP.
Global position in the T&A exports market
Both China and India have managed to establish themselves as strong contenders in T&A manufacturing. China is the largest T&A producer and exporter worldwide, with its exports valued at $274 billion in 2013 of which 60 per cent was contributed by apparel and 40 per cent by textiles. On the other hand, the estimated value Indias exports were $ 36 billion in 2013 of which 40 per cent came from apparel and 60 per cent from textiles. Within T&A manufacturing, there is greater scope for value addition in downstream activities like fabric processing and garmenting. It is crucial to realise that, for China, 60 per cent of the exports are come from apparel, while for India the corresponding number is only 40 per cent. This provides an opportunity for Indian manufacturers to engage in downstream activities within the country rather than exporting raw material and intermediates to other manufacturing countries that in turn convert them into apparel which is then exported. In addition to the US and Europe, China has also developed a strong market in Japan which India lacks at present. However, after the enforcement of a trade agreement between India and Japan in 2009, Indias exports to Japan have registered an uptick.
Industry-specific resource comparison
Some of the key elements for comparison of industry-specific resources in China and India are the availability of raw material for the textile industry, the installed capacity of textile machinery, and the availability of quality manpower.
In 2013, China produced 32 million bales of cotton of 480 lb. each, which translates to 27 per cent of the worlds cotton production. India w