Comparisons may well be odious, but working out how India is doing compared to some of the important sourcing countries in Asia—and how it can stem the gap—has been under discussion after a recent report featuring hard-eyed, honest analytics.
At the launch session of the report at India Habitat Centre in New Delhi, not-for-profit economic think tank Indian Council for Research on International Economic Relations (ICRIER) shared insights on the numbers and strategies that have helped Vietnam and Bangladesh grow their share of the export market several times over since 2020, as well as some of the key reasons China has remained the frontrunner in the $530 billion apparel export market.
The report was well-received by industry heads and the additional secretary for textiles, prompting open banter, wish lists, and a sense of hope that understanding the missing pieces can actually fuel India’s future more speedily.
Taking a look at some of the strategies that have worked for often rivaling neighboring countries revealed that global business has moved swiftly from one location to another in what was referred to as “the flying geese paradigm.” Analysis left many industry heads in the room at during the report analysis with what they described as “a quiet sense of inspiration” peppered with frustration.
That dissatisfaction arose from the fact that even by 2025, Indian apparel exports had not risen above 2020 levels, when India’s share of the global market was 3 percent. Meanwhile, Bangladesh moved from 2.2 percent to 9.9 percent and Vietnam to 6.77 percent in the same time frame. China went from 17 percent in 2020 up to 37 percent in 2015, and fell to 28.7 percent in 2025.
The comparative export numbers for 2025 made the point clearer: Indian apparel exports stood at $15.7 billion compared to Bangladesh’s $51 billion, Vietnam’s $39.4 billion, and China’s $151.18 billion.
“China went all the way up, and both Bangladesh and Vietnam were able to capture the market. How did it happen?” asked Ashok Gulati, distinguished professor with ICRIER. The focus of the report, he said, was to compare key areas of success that could help the industry forward.
In quick summary, he pointed out that some of the key factors that helped the growth in China were access to capital, steady capacity building, and huge economies of scale. “They also did a major undervaluation of their currency, which led to massive export subsidization,” he said, while highlighting the foreign investments and free trade agreements favored by Vietnam, and the lower labor costs along with better financial help for the industry in Bangladesh.
Sulakashana Rao, senior fellow, ICRIER, who also worked on the report, told Sourcing Journal that while China was succeeding with its vertically integrated mega factories, in India the average number of workers in a factory is 131, and between 600–800 workers in export-oriented factories.
India’s clusters, including Tirupur, Surat, Ludhiana and NCR, have grown organically but remain fragmented. The majority of enterprises in these clusters are small and medium-sized, which limits economies of scale and production efficiency.
Competitors, by contrast, operate through integrated ecosystems. Vietnam’s FDI-led parks and China’s textile towns minimize inter-stage transport, reduce lead times, and provide immediate, low-friction sourcing options for global buyers. India currently lacks equivalent integrated hubs that can combine fiber, fabric and fashion under one roof.
She elaborated on the fact that India’s export-credit architecture needed focused attention: “India has the highest cost of capital. In comparison, China is at 3.1 percent, and in Bangladesh nominal rates are 9 percent, but given their high inflation rates of 10 percent, in reality, their rates are negative. Vietnam too is at 0 to 1 percent real interest rate.”
“We need to ensure that the working capital and the cost of capital is reduced in India so that we can also scale up in that direction. China went one step ahead, with the credit insurance,” she said.
Manufacturers in the small and medium sector have long made the point that high financial costs are a bottleneck, and that India’s export-credit architecture needs focused attention, as the report highlighted. Working capital loans are at 9–11 percent, and term loans at 12–15 percent. Liquidity pressures are aggravated by delays in Goods and Services Tax (GST) refunds and Remission of Duties and Taxes on Exported Products/Rebate of State and Central Taxes and Levies (RoDTEP/RoSCTL) disbursals, and the withdrawal of the interest equalization scheme. However, lining up the comparisons gave clarity to the way forward, they said.
Rao emphasized that what had worked in each of the countries was growth across the ecosystem.
Anant Ahuja, director of Shahi Exports, which continues to be the leading exporter in India, took the discussion beyond academia, sharing the same point based on ground reality.
“One of the biggest lessons from this journey is that manufacturing success isn’t just about building factories, it’s about building systems. I will say that in many ways India is no longer competing simply on the cost of producing a garment. We’re increasingly competing on the value of an integrated system,” he said.
“If we look at countries that have successfully grown their apparel exports, one thing becomes quite clear. Competitiveness isn’t really about a single policy or a single factor. It’s about the overall ecosystem working well,” Ahuja said.
“We see that China built large-scale fiber-to-fashion clusters supported by infrastructure and coordinated industrial planning. Bangladesh reduced transaction costs through export-oriented systems. Vietnam leveraged trade agreements and foreign investments to create sort of plug-and-play manufacturing ecosystems that global brands could integrate into quickly. As India deepens its own trade partnerships, it will help ensure that Indian manufacturers compete on a more level playing field in global sourcing decisions, and several positive developments are already underway,” he said.
Many competing apparel exporters today benefit from preferential trade agreements with key markets, and India is joining the league, as free trade agreements with the U.K. and the European Union have been brokered. After a tense period in 2025, with reciprocal U.S. tariffs set at 50 percent by President Trump, negotiations towards better terms have set the tone for regaining the U.S. market this year.
Even as it appears that the conflict in the Middle East—which is resetting all projections for sourcing and may rewire the global sourcing markets—Rao said that the findings of the report remained valid.
“The conflict is having an effect on the entire globe, and India is paying a price too, but there is much in these measures that will remain the same, no matter what. We need an ecosystem that foresees and buffers across risks so that no matter how much the world changes, the key strength remains. We want to emphasize that trade or tariff gains are not just about competing with other countries; the key point is that there is some homework that India needs to do, and it is already late,” she observed.
“An investment of 10 million rupees in the textile and apparel sector will create 154 jobs, while the same amount of investment in the automobile sector will give you 27 jobs. What better way to create more jobs than to incentivize the private sector and support them to reach the global benchmarks?” she asked.
Meanwhile, Rohit Kansal, additional secretary in the Ministry of Textiles, clearly showed both a willingness to listen and connect the dots.
“Even today, we are among the top five exporters in the world. And unlike many other countries, we are not a one-trick pony. We export across the value chain. We export fashion, design, apparel, but we also export raw materials and yarn. And I think these are achievements that certainly deserve a round of applause.”
He pointed out achievements in the spinning and denim industries, as well as in cotton production—details that have long been cited as the strengths of the Indian industry.
However, as Rao pointed out, the urgency to act could not be emphasized enough.
“The government is trying to do something. There is also the promise of PM Mitra industrial parks, but these have to be fast-tracked. Even now, they are only expected to be ready by 2027–28. We have a very short action window and we need to make it happen on the ground, not just with promises,” she said emphatically. “It has taken us so many years to reach the $15 billion in apparel exports, and we don’t have much time to reach $40 billion exports by 2030.”
“This window of China-plus-one sourcing won’t wait for too long; definitely it is an opportune moment, but if it gets too late, what would be the point? The geese will fly away,” she said.
