Wondering how to start a readymade garment export business in India? Then, you have landed on the right blog post. In this blog post, we have included an in-depth guide about how to start a garment export business in India. Moreover, you will come to know the scope of garment export in India, the benefits of starting a garment export company in India and step by step guide to how to start garment export.
The Current Position And Scope of Garment Export in India
The industry of garment manufacturers in India is one of the oldest industries in the Indian economy. India’s textile sector can create a vast range of items for various domestic and international market segments.
- Market Size of Indian Garment Sector:
Around 4.5 crore people work in the Indian textile industry, including 35.22 lakh handloom workers. In 2018-19, the garment manufacturers in India provided 7% of total industry output (by value).
Moreover, in 2018-19, the Indian textiles and apparel industry contributed 2% to GDP, 12% to export revenues, and held 5% of world textiles and apparel trade. Between April and October 2021, garment export was US$ 22.89 billion.
By 2029, the Indian textiles market is expected to be valued at more than US$ 209 billion. Cotton production is expected to reach 37.10 million bales, with consumption reaching 114 million in FY21, up 13% from the previous year.
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- Government Initiative to Boost Garment Export:
The Indian government has developed many garment export promotion policies. Under the automatic way, it has also approved 100% FDI in the garment export sector. The PLI plan is worth Rs. 10,683 crores (US$ 1.44 billion) and is expected to provide a considerable boost to textile makers.
The Indian government has also taken the following initiatives:
- The Indian government has announced a uniform 12% goods and services tax on man-made fabrics (MMF), MMF yarns, MMF textiles, and apparel, which will take effect on January 1, 2022.
- The Ministry of Textiles approved the Rs. 160 crore (US$ 21.39 million) comprehensive handicrafts cluster development programme in October 2021. The government hopes to help domestic Small and Medium Enterprises(SMEs) and local artisans through this programme.
- In October 2021, the government also started to offer SAMARTH training at 75 training centres to expand the scheme’s reach among artisans.
- Between FY16 and FY22, the government allocated Rs. 17,822 crore (US$ 2.38 billion) for the ‘Amended Technology Up-gradation Fund Scheme‘ (A-TUFS), which aims to enhance the garment manufacturers in India and make doing business easier.
- In August 2021, Flipkart and Himachal Pradesh State Handicrafts and Handloom Corporation Ltd. (HPSHHCL) signed an agreement to help master artisans, weavers, and artisans showcase their signature items on e-commerce platforms.
- To improve the garments business, the Ministry of Textiles favoured a limited deal for the India-UK free trade agreement in March 2021.
- The United Kingdom was India’s fourteenth largest trading partner in 2020-21, with exports of US$ 8.7 billion and imports of US$ 6.7 billion.
- The Textile Ministry expects more market access for the Indian textiles and garment sector under the proposed trade deal, helping it achieve its full potential.
- A National Technical Textiles Mission is proposed in the Union Budget 2020-21, with Rs. 1,480 crore (US$ 211.76 million) for the period 2020-21 to 2023-24.
- The Directorate General of Foreign Trade (DGFT) has increased the incentive rates under the Merchandise Exports from India Scheme (MEIS) from 2% to 4% for two textile subsectors: readymade garments and made-ups.
- The Indian government has taken many steps, including the Amended Technology Upgradation Fund Scheme (A-TUFS), which is expected to create 35 lakh jobs and enable investment of Rs. 95,000 crore (US$ 14.17 billion) by 2022.
- During 2017-18 and 2019-20, the government approved India’s integrated Wool Development Programme (IWDP) to help the wool sector, from wool rearer to end consumer, improve quality and increase production.
Looking at these stats and numbers, there is no doubt that the scope of Garment export is huge in India and here’s how you can start your garment business in India:
How to Start a Garment Business In India?
Before starting your garment export from India, read this essential step-by-step guide to gain all of the essential insights and knowledge about readymade garment export. This comprehensive guide will teach you how to start garment business.
Here’s our in-depth YouTube Video explaining how to Export Garments from India:
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Step By Step Guide On How to Start a Garment Business
Step 1: Create an export plan as a prerequisite
Planning is the first step to making your name amongst garment manufacturers in India. Therefore, you should develop a foolproof export strategy to provide essential solutions. This strategy will help create a roadmap and a clear understanding of your production goals.
The company’s strengths and limitations are considered while creating an appropriate garment export plan. This step includes making essential decisions on the following factors of the clothing export business:
- Product type: Since the clothing industry is consumer-driven, selected products should fulfil market demand. Therefore, a globally popular product should be chosen.
- Export Pricing: Once you’ve chosen the product, you have to decide on export pricing. Create an appropriate price that makes your product suitable for the international market and helps you earn profits at the end of the day.
- Choose the market: Indian clothing is in high demand worldwide. Therefore, products must be developed for sale in high-demand markets.
- Financial Analysis: Finance is an essential part of running a business. The funds required for the production of readymade clothing must be analyzed both externally and internally, as well as sales analysis and pre-and post-shipment financing options.
Step 2: Production unit set up
You should be familiar with this process if you already have a readymade garment manufacturer in India. However, it is essential for beginners who want to invest in the garment export industry. Setting up a production unit is a massive task that requires multiple processes, which are described below:
- A strategy is made to conceptualise your idea and turn it into reality for any production.
- After that, you need to study garment manufacturing in depth.
- Once you have done the research, you need to decide how much money you want to invest in your company.
- The next step is to decide the best location for your factory.
- Moving forward, you need to select a product category, an ideal product to produce, and the quantity produced.
- After deciding the product, you’ll need to figure out which machines and trained technicians you’ll need for your production.
- Then the different licences required to open a factory are secured.
- Then the factory is set up and ready for running!
Therefore, once a production unit has been set up and started, you may focus entirely on the garment export business part.
Step 3: Get various mandatory licenses for export business
Export and Import are highly legalised activities that require a few licences from the manufacturer in line with foreign trade policy. These are some of the licences you’ll need when you’ve successfully set up a production unit for readymade garment export:
- Company-Firm Incorporation
It is a legal document that confirms your company’s formation. It separates between assets, investors’ income, and owners.
- Import-Export Certificate
The Director-General of Foreign Trade issues a certificate with a ten-digit lifetime validity code to people who want to start an import-export business.
It’s also known as the Registration Cum Membership Certificate, and organisations like the Export Promotion Council issue it. For the textile and garment choice, it is required.
- GST Registration
It is also known as Goods and Services Tax Registration. The government issues it to taxpayers who want to run their business under the GST scheme.
- MSME Registration
It refers to the registration of Micro, Small, and Medium Businesses. It is done to promote these industries by providing them with particular advantages.
Step 4: Get Garment Export Orders
After taking care of the legalities, your main focus should be getting export orders. These orders could be achieved by the use of a multipotential approach, such as:
- Send mails to international garment traders,
- Running social media advertise and going online,
- Join export communities,
- Registering on online trade marketplaces,
- Responding to online queries, &
- Attending international trade fairs, seminars & conferences.
Wondering which countries are the best to export readymade garments? Watch our video to get all the details that you should be knowing:
The Benefits of Starting a Garment Export Company in India
The following are some of the reasons why you should start a clothing exports business in India:
- The Foreign Market for Developing Industries,
- Prices are lower than in other foreign countries,
- Easy Access to the Global Market,
- Helps in the formation of a large number of jobs,
- Contributes around 2% of total GDP,
- Demand is continuing to rise,
- It provides for 15% of total export earnings,
- The Apparel Export Promotion Council (AEPC) is working hard to increase India’s garment exports.
Top 10 Garment Manufacturers in India
- Raymond Ltd
Raymond is one of the leading garment manufacturers in India, with a market share of over 60%. It is one of the first three fully integrated worsted suiting manufacturers globally, with a capacity of 38 million metres in wool and wool-blend fabric.
Raymond may be the only global company that produces high-value pure wool with a various product selection of nearly 20,000 suiting fabric types and colours to fit any age, occasion, and style. Raymond’s textile exporters in India are available in more than 55 countries, including the United States, Canada, Europe, Japan, and the Middle East.
- Loyal Group
The Loyal Group is one of the top garment manufacturers in India, offering various textile and clothing products and services.
Three composite mills, one spinning mill, one dye house, four garment manufacturing facilities, one trade cum retailing company, and a Joint Venture trading company are all part of the garment export company in Italy.
- Mandhana Industries LTD
Mandhana is one of the prominent multi-divisional garment manufacturers in India with multiple locations. Along with state-of-the-art infrastructure, the company specialises in custom clothes manufacturing. Designing, yarn dyeing, weaving, processing, printing, and garment manufacturing are part of Mandhana’s business.
- Alok Industries Ltd
Alok Industries Ltd is one of the leading vertically integrated garment manufacturers in India with five major sectors, including cotton yarn, clothing fabric, home textiles, garments, and polyester yarn that delivers end-to-end solutions.
This garment export firm has a vast customer base, including major international brands and domestic and international retailers and garment exporters in India. They have some of the largest shops in the world and are the leading garment manufacturers in India.
- Arvind Mill
Arvind Mills, founded in 1931 by three brothers, has long been a staple of the Indian garment industry as a manufacturer of high-end superfine fabrics. Arvind is another one of the leading garment manufacturers in India and has dominated the market with brands including Arrow, Flying Machine, USPA, New Port, Mega Mart, and The Arvind Store.
Arvind has expanded into other essential industries in recent years, including fabrics, garments, advanced materials, chemicals and dyes, retail, engineering, and telecommunications.
- SEL Group
SEL is one of India’s largest textile conglomerates and one of the top garment manufacturers in India since 2018. It has facilities in Punjab, Rajasthan, Haryana, Himachal Pradesh, and Madhya Pradesh, ranging from spinning, knitting, and fabric processing to value-added products, including terry towels ready-made clothing. They are the top garment export company provider of yarn and thread to European markets.
- Nahar Spinning
Nahar Spinning Mills Ltd is a part of the Nahar Group. It is one of the leading garment manufacturers in India as well as textile exporters in India, specializing in woollen/cotton hosiery knitwear and woollen textiles. The Company includes seven multi-location operations that produce various products, with over 60% of them being garments exported to Europe, North America, South America, and Asia.
- KPR Mill
KPR Mill Limited is one of the top garment manufacturers in India that produces yarn, knitted grey, coloured fabric, and readymade garments and enterprises. With an annual capacity of 95 million pieces, the company boasts one of India’s most extensive garment manufacturing facilities.
It has also built windmills in Tamil Nadu to create green power for captive use, which will fulfil 75% of the state’s power needs.
- Sutlej Textiles
Sutlej Textiles is the next one of its own kind garment manufacturers in India that works in every textile and garment production. Their vertically integrated production facilities cover everything from spinning and weaving to dyeing and finishing, as well as garment manufacturing. It also has operating facilities in Russia, Spain, Singapore, Sri Lanka, and many more.
Sutlej Textiles is a flagship company of the KK Birla Group, a multi-product conglomerate. This garment export company is a global leader in fertilizer, engineering, textiles, sugar, tea, coffee, food, goods, media, information technology, biotechnology, and shipping. It is a multi-sector global clothing company.
- Bombay Rayon Fashions Ltd
Bombay Rayon Fashions Ltd is one of the leading garment manufacturers in India vertically integrated textile and garment firm that uses state-of-the-art manufacturing facilities to produce a wide range of textiles and garments.
Besides being India’s largest shirt manufacturer, Bombay Rayon Fashions Ltd now employs over 38,000 people and produces over 90 million garments per year. This garment export high employment company has been a continuous contributor to India’s GDP.
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GFE brings together all of the information you need to export garments from India effectively and efficiently in one spot. GFE helps all inspirational importers and exporters in running their businesses. We have helped 1000+ exporters so far, and we would like to do the same for you.
Looking for support to have a smooth import-export business? Get in touch with our import-export professionals today by calling us on 9211066888 or click the button below to start the conversation ASAP.
1. How to Start a readymade garment export business in India?
Here is a complete guide to starting a readymade garment export business in India:
Step-1: Create an export plan as a prerequisite,
Step 2: Production unit set up,
Step 3: Get various mandatory licenses for export business,
Step 4: Get Garment Export Orders.
2. Can I export clothes from India?
It is necessary to open a current account with a bank that can deal in foreign exchange. Getting an IEC for export/import from India is required by the Foreign Trade Policy. The procedure for obtaining a PAN-based IEC is outlined in paragraph 2.05 of the FTP, 2015-20.
3. Which fabric is most exported from India?
In 2021, cotton ready-made garments accounted for a large part of Indian garment exports. Cotton textiles and manufactured fibres, on average, had a larger export value than jute and silk and raw materials from the country.
4. Which country imports clothes from India?
In 2019 China, the United States, Bangladesh, Vietnam, and Indonesia were the leading partner countries where India imported textiles and clothing.