Analyze the reasons behind India's lower share in the EU textile market compared to Bangladesh. What strategies can India adopt to enhance its position in the competitive garment industry?

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Introduction

The European Union (EU) is one of the largest global markets for textiles and garments. Despite being a major textile producer, India’s share in the EU garment market remains lower than Bangladesh’s. This disparity highlights structural and policy-related challenges affecting India’s competitiveness.

Reasons for India’s Lower Share

1. Tariff Disadvantage

Bangladesh, as a Least Developed Country (LDC), has benefited from duty-free and quota-free access to the EU under the Everything But Arms (EBA) scheme. India faces higher tariff barriers, reducing price competitiveness.

2. Focus on Intermediate Goods

India’s exports to the EU are concentrated in yarns and fabrics rather than value-added finished garments, limiting export earnings and market presence.

3. Scale and Cost Competitiveness

Bangladesh’s garment industry operates on large-scale, low-cost production with competitive labour costs and simplified compliance systems, attracting global brands.

4. Regulatory and Logistical Bottlenecks

Higher logistics costs, complex labour regulations (though improving), and infrastructure gaps reduce India’s export efficiency.

5. Integration into Global Value Chains (GVCs)

Bangladesh is better integrated into apparel-focused GVCs, while India’s fragmented industry structure affects responsiveness and speed-to-market.

Strategies for Enhancing India’s Position

1. Leveraging Trade Agreements

Effective utilization of the India-EU FTA (under negotiation) to secure tariff concessions and improve market access.

2. Focus on Value Addition

Shifting from raw materials to high-value garments, technical textiles, and sustainable fashion products.

3. Improving Infrastructure and Logistics

Reducing turnaround time through PM Gati Shakti and port modernization initiatives.

4. Labour and Compliance Reforms

Ensuring flexible labour laws, skill upgradation, and adherence to ESG standards to attract global buyers.

5. Production-Linked Incentives (PLI)

Strengthening incentives for scale, technology adoption, and cluster-based manufacturing.

Conclusion

India’s lower share in the EU textile market stems from tariff disadvantages, limited value addition, and structural inefficiencies. Strategic trade negotiations, industrial modernization, and integration into garment-centric GVCs are key to enhancing competitiveness in the global apparel industry.

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