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Indian textile and apparel business optimistic about China's low-cost fabrics
As the demand for apparel in India continues to rise this year, local textile companies are expected to maintain steady profits in the upcoming season. However, in recent months, a significant appreciation of the Indian Rupee has prompted many Indian apparel firms to reconsider their sourcing strategies. Specifically, they are now looking to cut costs by reducing the import of finished garments and instead sourcing raw fabrics from China.
It is reported that when the rupee was weak, Indian textiles became more expensive, pushing many apparel manufacturers to look for cheaper fabric options abroad. But with the rupee strengthening steadily, Chinese fabric prices are now 5% to 10% lower than those in India, prompting a growing number of companies to shift their sourcing to China. According to industry reports, fabric costs account for around 60% of the total cost in the garment sector.
Industry experts believe that the rising value of the rupee is having a negative impact on India's textile industry, which is the country's second-largest employment generator after agriculture. In 2015, the textile sector was projected to generate sales of Rs 110 crore, with exports contributing approximately Rs 45 crore. This shift in sourcing highlights the increasing pressure on Indian manufacturers to remain competitive amid fluctuating currency rates and global market dynamics.