Rajesh Satam: "India benefits indirectly from the transition of the Chinese market"

By

Matthieu Guinebault

Published
Oct 22, 2013

Apparel fabrics trade show Intertextile began on Monday in Shanghai, rounding up thousands of the industry’s key players. FashionMag.com is on the ground to deliver a series of articles on the textile industry in China and its neighboring countries. Matthieu Guinebault kicks off with an interview with Rajesh Satam, deputy director at Texprocil (The Cotton Textiles Export Promotion Council in India), a non-profit, government supported body that works with over 70 companies present at the show.

As China takes a back seat in low-end manufacturing, another giant is jumping in to fill its place. In an indirect manner, India is benefitting from the change in the Chinese market as a main supplier of raw materials to those countries that export finished garments to China.

FashionMag: What have been the impacts on India following the evolution of the Chinese market?
Rajesh Satam: Demand in China rapidly increasing, therefore it is forced to outsource in countries where the prices are lower. For example, a lot of finished garments in China are exported from Vietnam. The Chinese market is not really in competition with the India because we work at different levels of production. India has benefited indirectly from China’s greater demand for raw materials due to its rapid evolution. We do have a lot of interaction with the country, however, because we come here every two months or so.

FM: You mean via intermediate countries that export finished goods to China such as Bangladesh, for example?
RS:Bangladesh benefits from duty-free exportations to forty of the world’s largest markets. Manufacturing in the country is also much less expensive because of low labour costs, which is something India can never compete with. The products that come out of the country will only increase in quality and as that happens, Bangladesh will need higher quality materials. That is where India comes into play. We are one of the biggest suppliers of raw materials, especially in Bangladesh as we benefit from duty-free exports to the country. As you can imagine, we are very happy with the current situation!

FM: Do you think that the Indian market will ever move towards the production of finished garments?
RS: At the moment, India does not have the necessary capacity to produce finished garments, mainly due to restrictions put in place by our government. This is something that many other countries do not have to deal with. Aside from that, our internal demand for finished garments is so high that we are not able to supply other countries on top of that. Because of this, Bangladesh is not in competition with us – in fact, we complement each other. That being said, there are currently various investment underway in India to help reinforce our production capabilities. Give us five years and the situation will have certainly evolved.