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

India's textile exports saw modest growth in April-November, but this may be short-lived due to a volatile rupee and challenges in the global market. While a weaker rupee could boost exports, the gains may be offset by increased raw material costs and the need for greater competitiveness.

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.