Unit 1 - The Garment Industry
Structure of the Garment Industry
The garment industry is one of the largest and most complex sectors within manufacturing,
involving a wide range of activities, from the sourcing of raw materials to the final sale of
finished clothing. Its structure can be divided into several key stages:
1. Raw Material Sourcing: This includes the production and procurement of fibers such as
cotton, wool, silk, and synthetics, which are used to manufacture fabrics.
2. Fabric Production: The fibers are processed into yarns and then woven, knitted, or
otherwise manufactured into fabrics.
3. Garment Manufacturing: This is the process of transforming fabric into finished
garments. It includes cutting, sewing, and finishing operations.
4. Quality Control and Inspection: Finished garments are inspected to ensure they meet
quality standards and customer specifications.
5. Distribution and Retailing: Once garments are produced, they are distributed through
wholesalers or directly to retailers, who then sell them to consumers.
6. Marketing and Sales: Marketing teams promote the garments through various channels,
including online platforms, advertising, and in-store displays.
Sectors of the Garment Industry
The garment industry is typically divided into six major sectors, each representing a different
aspect of the clothing production and distribution process:
1. Fibre Production Sector: This includes the cultivation and manufacturing of natural
fibers (cotton, wool) and synthetic fibers (polyester, nylon).
2. Textile Production Sector: This sector transforms fibers into fabrics through processes
like weaving, knitting, and dyeing.
3. Apparel Manufacturing Sector: Garment production takes place here, where fabrics are
cut and sewn into finished clothes.
4. Accessories and Trim Sector: This sector produces the various accessories and trims
needed for garments, such as buttons, zippers, and labels.
5. Retail Sector: This includes brick-and-mortar stores, e-commerce platforms, and other
outlets that sell finished garments to consumers.
6. Logistics and Supply Chain Management: This sector involves the movement of raw
materials and finished products across different locations and markets.
Product Types and Organization
The garment industry produces a wide variety of clothing and apparel products, which can be
categorized into several key product types:
1. Ready-to-Wear (RTW): Mass-produced garments that are ready for immediate wear,
without the need for customization. These are sold in large quantities in retail outlets.
2. Made-to-Measure: Garments that are made based on a customer’s specific
measurements, offering a better fit compared to RTW items.
3. Haute Couture: High-end, custom-made garments that are crafted for individual clients.
Haute couture is often associated with luxury and fashion houses.
4. Sportswear and Activewear: Clothing designed for physical activities, such as sports
and workouts, including items like tracksuits, yoga pants, and jerseys.
5. Casual Wear: Everyday clothing that emphasizes comfort, such as t-shirts, jeans, and
casual dresses.
6. Formal Wear: Includes garments like suits, evening gowns, and tuxedos, typically worn
for formal occasions.
In terms of organization, the garment industry often operates through:
1. Vertical Integration: Some companies control the entire production process, from raw
material sourcing to retailing, allowing for greater control over quality and pricing.
2. Horizontal Integration: This involves collaboration between companies at the same
stage of production, such as multiple apparel manufacturers working together to meet
large orders.
3. Outsourcing: Many companies outsource production to countries with lower labor costs,
reducing expenses while maintaining large-scale production.
Apparel Industry in India
India has a long and rich history in the textile and apparel sector, which is one of the country's
largest industries. The Indian apparel industry has evolved significantly in recent years and is
recognized globally for its diversity, craftsmanship, and scale.
Domestic Industry
1. Size of the Industry: The domestic apparel industry in India is vast, catering to a
population of over 1.4 billion. The sector is valued at approximately $75-80 billion as of
2023, with expectations for steady growth.
2. Nature of the Industry: The domestic market is highly fragmented, with a large number
of small and medium-sized enterprises (SMEs) dominating the industry alongside bigger
players. The market consists of both organized and unorganized sectors, with the latter
often driven by traditional textile production methods.
3. Regional Specialization: Different regions of India are known for specializing in certain
types of textiles or garments. For example, Tirupur is famous for its knitwear, while
Ludhiana is known for woolen garments.
4. Growth of E-commerce: In recent years, the rise of online shopping platforms like
Flipkart, Myntra, and Amazon has had a profound impact on the domestic apparel
industry, opening up new sales channels for both big brands and small businesses.
5. Changing Consumer Preferences: Urbanization, increased disposable income, and
exposure to global fashion trends have led to evolving consumer preferences, with a
growing demand for Western wear, luxury brands, and sustainable fashion.
6. Sustainability and Ethical Fashion: There is a growing movement towards sustainable
fashion in India, with an increasing number of brands focusing on eco-friendly fabrics,
fair wages, and reducing their environmental footprint.
7. Key Players: Large domestic players include brands like Raymond, FabIndia, and
Aditya Birla Fashion & Retail. There is also a significant presence of global brands like
Zara, H&M, and Levi’s.
8. Challenges: The industry faces challenges such as fluctuating raw material costs
(especially cotton), outdated technology in many SMEs, and competition from imports.
9. Government Support: Various initiatives such as the “Make in India” campaign and
incentives like the Production Linked Incentive (PLI) Scheme are designed to support
and grow the domestic textile and apparel sector.
10. Future Outlook: The domestic market is expected to grow steadily in the coming years,
driven by factors such as rising incomes, a growing middle class, and a shift towards
organized retailing.
Export Industry
India’s garment export industry plays a crucial role in the country’s economy, contributing
significantly to its GDP and employment.
1. Size of the Industry: India is one of the largest garment exporters in the world, with the
industry valued at approximately $40-45 billion as of 2023. The country exports
garments to regions like the U.S., Europe, and the Middle East.
2. Nature of the Industry: The export sector is characterized by large-scale production,
with many factories catering to bulk orders from international brands. These
manufacturers often operate in export-oriented industrial clusters like Tirupur, Bengaluru,
and Delhi NCR.
3. Export Product Types: India exports a wide variety of garments, including casual wear,
formal wear, traditional wear (saris, kurta sets), and specialized products like children’s
wear and accessories.
4. Competitive Edge: India’s diverse textile production base (cotton, silk, wool, jute),
skilled labor, and reputation for quality craftsmanship give the country a competitive
edge in the global apparel market.
5. Challenges: The export industry faces challenges such as competition from countries like
Bangladesh and Vietnam, rising labor costs, compliance with international labor laws,
and fluctuating exchange rates.
6. Government Support: To boost exports, the government has introduced several
schemes, including duty drawback programs and export incentives, to make Indian
garments more competitive internationally.
7. Impact of Free Trade Agreements (FTAs): India is negotiating multiple FTAs,
especially with key markets like the European Union and the U.K., which could provide
further boosts to garment exports by reducing tariffs and trade barriers.
8. Focus on Sustainable Exports: International buyers are increasingly demanding eco-
friendly products. Indian exporters are responding by adopting sustainable practices, such
as using organic cotton, water-efficient processes, and ethical labor practices.
9. Industry Growth: Despite challenges, the industry is expected to continue growing,
supported by increasing demand from global fashion brands, the rise of fast fashion, and
expansion into new markets.
10. Impact of Technology: The adoption of advanced technologies such as automation, AI,
and data analytics in manufacturing and supply chain management is helping improve
efficiency and reduce lead times in the export sector.
