Asia is likely to dominate garment production over the coming decade while China looks at reducing its apparel manufacturing operations and move up the value chain, according to a recent report by Fitch Solutions. India and Indonesia, with cheap labour and large domestic markets, may, however, lose out due to the lack of conducive business environment.
Many other Asian nations have favourable labour market dynamics for apparel production, sufficiently predictable logistical connections to serve external trade, free trade agreements that ensure preferential access to major consumer markets and geographic proximity to raw material producers in China and India, the report said.Asia is likely to dominate garment production over the coming decade while China looks at reducing its apparel manufacturing operations and move up the value chain, according to a recent report by Fitch Solutions. India and Indonesia, with cheap labour and large domestic markets, may, however, lose out due to the lack of conducive business environment.#
"Accordingly, we have already started to see Vietnam benefiting from these trends and expect to see more investments into the country. In addition, we expect Bangladesh, Cambodia and Myanmar to see greater gains in the coming years as costs in Vietnam also rise," Fitch Solutions said.
It identified India and Indonesia as potential recipients of manufacturing shifts and growth in terms of global apparel export share, according to a news agency.
However, the two countries' annual growth rates will look less impressive compared with the other four countries—Vietnam, Bangladesh, Cambodia and Myanmar.
"The countries' large populations, at 1.4 billion in India and 274 million in Indonesia, make them the second and fourth-most populous nations, respectively, in the world and suggest strong growth potential for domestic consumption," said the Fitch report.
However, a lack of preferential trade access to the US and EU markets, as well as higher labour costs, will act as obstacles for these markets, it observed.
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