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Resetting Global Supply Chain: India’s Big Opportunity


Once the corona pandemic ends and the dust settles, the fashion is expected to change rapidly. The global industry is abuzz with discussions about inshoring and nearshoring and especially in the wake of the rising anti-Chinese sentiments, this presents lucrative opportunities for other countries, including India, panelists discussed on a webinar organised by NIFTA (Association of NIFT Alumni).

Resetting Global Supply Chain: India's Big Opportunity

Buying & Sourcing Are Going to Change Dramatically

The pandemic has elevated the need to change the procurement and sourcing template of the fashion industry. Ideally, brands and retailers place large orders and procure about six months’ out resulting in tied up working capital and as is apparent now – too much inventory. The shift post the pandemic is expected to lean towards smaller orders that arrives on time thereby reducing inventory liabilities and allowing buyers to have a quicker read.

“Businesses will have to stop chasing the cheapest needle and start looking at total margin. We will have to emphasize more on SKU and less on MOQ per SKU – so that we do not end up with heavy liability for products that tend to not work well. This will also bring a shift in the relationship with the vendor community, who will have to accommodate the change,” said , Founder and President, , USA.

Fashion buyers are expecting the pandemic to result in a big consolidation – both on the retail and the supply side. Unfortunately for the industry, there are chances that not all suppliers or retailers could make it to the other side. The epidemic has also taught the industry to consider the country specific risk factors of their partners. “Post the pandemic, the industry outlook on the risk factor, something that has been largely overlooked upon till now, will change dramatically. And finally, the savior will be technology – I am assured that the rate of adoption of technology will jump by manifolds because of the pandemic,” added , Director, , Australia.

The Opportunity for India

As lockdowns are lifted, businesses could prove to be difficult in the short term. Coming out of the shock will demand joint efforts from everyone in the supply chain – right from the customer, apparel manufacturers, employees, yarn and fabric mills to the government. “But every adversity carries with it the seed of an equivalent or greater benefit. With reduced expenses and overhead and agility we can definitely offset the effects of the crisis to a good extent. The anti-China sentiment presents India with a great opportunity considering India’s potential from farm to port. It is not possible, just look at how the whole PPE supply chain, which was nonexistent in India, was overhauled just within a month,” reflected , Director, , India.

China’s market share in the global fashion industry is around 176 billion accounting to roughly 38 percent of the global share, while India stands at a mere 4 percent. Hence, as the global demand takes a hit in the time to come, the primary focus of the nation should be to retain the existing market share for the short term.

Goenka also stated that it would take the joint efforts of the Ministry of Textiles, Apparel Export Promotion Council (), Confederation of Textile Industries and leading brands to work with Indian fabric mills to manufacture fall holiday fabric in India at the right price and quality. This would help the country in better utilization of it capacities across the supply chain and encouraging business.

Continued Support from Buyers

As published earlier, the pandemic is taking a major toll on the developing countries – while shipments worth US$ 3 billion are at stake for Indian apparel exporters, Bangladesh has sustained loss to the tune of more than US$ 3.11 billion. While the Bangladesh Garment Manufacturers and Exporters Association has extensively utilized social media to reach out to the global fashion community, India’s response has been rather passive.

, Chairman, AEPC, assured the panelists that organization has taken serious steps to safeguard the interests of suppliers in India. “We have requested the Hon’ble Minister of Textiles to appeal to the buyers to support their Indian partners by not canceling orders and payments. We have also reached out to most buyers – brands, retails and importers – to continue their support in this critical time and most of them have promised to honor the request. We have also reached out to leaders and organizations in Bangladesh and Sri Lanka in an attempt to reach a viable solution together. We are also in talks with the Ethical Trading Initiative and The International Labour Organization who have ensured us of their respective support in this humanitarian crisis,” he adds.

On Increasing Efficiency

Unlike Bangladesh and Vietnam, India has the distinct advantage of being a textile producer, with the fabric industry clocking US$ 16 billion in exports in the last fiscal. The fabric industry can now focus on working closely with the manufacturing industry to increase efficiency and overall exports.

According to Sailesh Goenka, the entire value chain of the yarn and fabric industry should now focus on a long term approach. “We definitely need to have more meaningful relationships between apparel manufacturers and fabric mills. The mills need to be aligned to retailers’ and brands’ requirements as well. We also need to concentrate on building speed as well as ensure that transactional businesses are in place with partnerships – because, it is highly possible that we all would be compelled to work a lot more in debt in the near future,” he adds.

The global economy will be under tremendous strain in the aftermath of the novel coronavirus epidemic. With job loss and pay cut on cards for millions across the world, the global discretionary spend will be heavily affected. While it hard to predict the gross impact, it is fairly apparent by now that it is going to be significant. Going ahead, buyers will have many choices, but it will be indispensable for suppliers to meet requirements and offer value – be it pricing, delivery speed or designs and innovation to turn this adversary into an opportunity.