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

India's textile exports saw modest growth, but gains may be short-lived due to a volatile rupee and challenges in the global market. A weak rupee could benefit exporters, but also increase import costs for raw materials. Long-term gains require 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.