Following the phasing out of muti-fibre arrangement (MFA) by the end of this year coupled with the global majors decision to outsource garments from India, the garment-makers, with an annual export potential ranging from $10 million to $50 million each, are rushing to Hyderabad, according to chief investment consultant (apparel exports) to AP government S K Kanodia. .
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He also added that a mega Garment city on the outskirts of Hyderabad with an investment of 30 crore rupees is being planned by the state government to provide basic infrastructure facilities. The recent government marketing exercise in the Gulf countries had attracted these garment-makers, he said. .
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Despite the opening up of the world trade by January next, these companies find it difficult to compete in the global markets owing to high-cost labour and infrastructure costs. They also have the disadvantage of procuring raw materials from countries like India to manufacture garments, which further cut short their competitiveness in the global markets, he said. .
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Though China being the major competitor for India in the garment exports, one of the reasons for these companies to look at India for their operations is due to the cheap labour and production costs and the availability of quality raw materials, he pointed out. .
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The recent decisions of global retail majors such as Wal-Mart and JC Penny to outsource garments worth over $12 billion from India over a period of time have provided an added advantage for these companies to choose India as the base, Mr Kanodia said. He is, however, non-committal on the investment potential and timing of their entry into Hyderabad. .
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Source: Fiber2Fashion
Date:2/19/2004
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