Roll-out of GST is leading to consolidation in the garment sector across the country, according to Raj Dugar, Vice-President and Convenor, Eastern India Garment Manufacturers & Exporters Federation.
While mergers and acquisition opportunities are increasing in the organised sector; there is a distinct move towards consolidation and transparent trade practices in the unorganised sector, he said.
Nearly 70 per cent of garment manufacturing in India is through the unorganised sector.
“GST has brought about structural changes in the sector. It is not just about increased acquisition opportunities in the organised sector but also about a move from unorganised to organised activities,” he told BusinessLine on the sidelines of Fashion Expo 2018, a B2B event for garment manufacturers and retailers.
Many smaller units that were previously unorganised or semi-organised in nature are becoming organised players. Some unorganised players are also becoming suppliers or third party manufacturers for the organised units.
India has some 40,00,000-odd garment manufacturing units (including both organised and unorganised sectors); of which 300,000 are located in West Bengal and the eastern region.
Apart from West Bengal, the other major garment manufacturing clusters are located in Tamil Nadu , Karnataka , Delhi-NCR, Punjab , Gujarat among others.
Eyeing increased exports
According to Dugar, the federation is expecting garment exports from West Bengal to double, from the present ₹1,500 crore-odd, over the next five years.
Kidswear and knitwear are the two major segments that will drive this export growth in the State.
A host of policy measures like improvement in infrastructure, integrated manufacturing facilities and modern training centres are said to be some of the reasons leading to this rise.
“Exports from West Bengal are growing at around 4-5 per cent per annum. And if the policy measures come into effect properly then the export revenues may jump by 100 per cent over the next five years,” he said.