India Will Become Soft Call For Clothing Brands Looking To Diversify: Gokuldas Exports MD
Due to Bangladesh's political instability, soft conversations on places for sourcing are likely to surface among retailers, and India will come to their minds, Ganapathi said.
India will naturally become a soft call for clothing brands looking to diversify from a country where they have a lot of exposure, said Sivaramakrishnan Ganapathi, managing director of Gokuldas Exports Ltd.
Many clothing brands who were thinking of diversifying their sourcing options, will now accelerate the thought process after the events in Bangladesh, he said. In such situation, India naturally becomes a good option for them, given the country's vast supply chain.
"India has good mill base, especially in cotton viscose, and strong garmenting base as well. There will be a lot more retailers who will consider incremental sourcing from India," Ganapathi said.
Gokuldas Exports conducts business with most of the garment retailers across the globe, with exposure in Bangladesh. However, these will evolve over time as all eyes remain on Bangladesh, and how the situation settles, and how quickly factories start operate in the country, the MD said.
Bangladesh, home to a huge base for garment manufacturing, and source of materials for many retailers, saw wide protest against the government's scheme to reserve 30% of the civil service jobs for freedom fighters and their descendants in last month. The unrest resulted in resignation of Prime Minister Sheikh Hasina on Monday, and her subsequent escape.
Due to this political instability, soft conversations on places for sourcing are likely to surface among retailers, and India will come to their minds, Ganapathi said. Nevertheless, it's to soon to see any actual move to diversify, or alter orders from Bangladesh, he noted.
As far as cost differential is concerned, Bangladesh has some leverages compared with India in terms of lower labour cost, weak currency, and duty free access to European markets, Ganapathi said.
As India's free-trade-agreements with UK or Europe shape up, it could become a level-playing field. But Bangladesh continues to enjoy the advantage at the moment, he said.
