The textiles and apparel (T&A) sector has historically served as the first step into industrialisation for labour-abundant economies. This pattern is reinforced by the flying geese trajectory that has shifted production from high- to lower-wage countries across East and Southeast Asia. Today, global apparel trade remains highly concentrated: the European Union (EU) and the United States (US) account for nearly 60 per cent of the global import demand, while China, Bangladesh, Vietnam and India collectively contribute about half of the world exports (ITC Trade Map, 2024). Between 2000 and 2024, China’s global apparel share declined from 37 per cent to around 30 per cent, enabling new entrants to expand. For example, Bangladesh’ share in global exports increased from 2 to 10 per cent and Vietnam from 1 to 6 per cent over the period 2000 to 2024. Notably, India’s share during the same period, despite a fibre-to-fashion base, craft heritage and large workforce, has remained stagnant at approximately 3 per cent.
This policy brief examines the specific policy instruments, institutional arrangements and industrial strategies that enabled China, Bangladesh and Vietnam to build competitive apparel ecosystems across five pillars of competitiveness (scale, capital, labour, trade facilitation and institutional mechanisms). China’s rise is driven by vertically integrated mega-clusters and predictable fiscal-financial systems; Bangladesh leveraged liquidity instruments such as back-to-back letter of credit and bonded warehouses to compress lead times; and Vietnam combined FDI-driven industrial parks with FTA access. We recommend a sequenced (short, medium and long-term) reform pathway that builds integrated fibre-to-fashion ecosystems, lowers the cost of capital, upgrades productivity and supervisory skills, embeds cluster-level governance and aligns trade policy with buyer demand. With sequenced reforms, immediate liquidity and policy certainty, medium-term diversification and cluster integration and long-term fibre-neutral, sustainability-led transformation, India can expand apparel exports from USD 15.7 billion (FY 2025) to the target of USD 40 billion by 2030, set by the Government of India.
