How India is capitalizing on shifting supply chains as buyers move away from China and Bangladesh
India’s apparel exports rose 11.3% year-over‑year in May 2025, as global brands and retailers redirect their sourcing away from China and Bangladesh. This shift is fueled by a mix of geopolitical instability, rising trade barriers, and increasing demand for diversified supply chains. India is emerging as a reliable, strategically positioned alternative.
Why India is gaining ground:
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Political stability & tariff advantages: Recent political upheavals in Bangladesh and new U.S. tariffs on Chinese apparel have positioned India as a more stable and cost-effective choice.
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High-growth export potential: While India currently accounts for about $10 billion of U.S. apparel imports, this is just a fraction of the $120 billion American apparel market—offering vast room for growth.
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Post-COVID rebound: After several years of stagnation due to the pandemic, India's textile sector is regaining momentum.
Challenges on the Path Ahead
Despite this momentum, India's apparel sector still faces significant hurdles:
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Raw material costs – Indian cotton remains expensive. To meet demand, India is expected to import over 3 million bales of cotton in 2024–25—more than double the previous year.
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Labor & capacity constraints – Production hubs like Tiruppur are struggling with labor shortages. Most factories are relatively small (600–800 workers) compared to Bangladesh’s larger operations, limiting scalability.
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Cost competitiveness – India’s average garment worker wages ($180/month) are higher than those in Bangladesh ($139/month), and stricter labor laws also raise compliance costs.
Strategic Levers for Sustained Success
To secure its position as a long-term sourcing hub, India must act on several strategic fronts:
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Workforce expansion: Government-backed training initiatives aim to add hundreds of thousands of skilled workers to the sector.
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Sustainability investments: India is investing in cleaner energy sources like solar and biomass to meet international buyers’ sustainability mandates, with a goal of nearly zero-emissions fashion production by 2030.
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Ease of doing business: Simplifying labor regulations and encouraging automation can help India match the manufacturing efficiency of its global rivals.
In Summary
India has a critical opportunity to become the preferred global apparel supplier as buyers diversify away from China and Bangladesh. With the right investments in raw materials, workforce development, and policy reform, India can capitalize on this moment. But to scale sustainably, the country must confront its infrastructure, labor, and competitiveness challenges head-on.
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