Labour-intensive exports: Gains likely to be short-lived

India's textile export growth is likely to be short-lived despite a recent surge, driven by factors such as a volatile rupee and unrest in competing nations like Bangladesh. While this presents opportunities for Indian companies, long-term gains require increased competitiveness and product diversification.

For instance, India's monthly readymade garment exports average at just $1.1 billion compared to China's $13 billion. Even neighbouring Bangladesh, despite facing domestic unrest, manages to export three times more than India. In October 2024 alone, it exported $3.3 billion worth of readymade knitwear and woven garments, marking a 22% increase against the same month in 2023.

Bangladesh's domestic challenges have prompted some global buyers to diversify production, presenting India with an opportunity. "This is a directional change, and our task is to turn it into a structural opportunity," Damodaran says, adding that Indian companies should utilise the PM Mitra Parks being set up in seven states and focus on greenfield investments to meet global demand.