Asia will remain a leading player in clothing production in the next decade, according to the latest study by analytics firm Fitch Solutions, as China decreases clothing production and increases the value chain. The report says that the lack of conducive business conditions may result in India and Indonesia losing out.
It notes that many Asian states will benefit from favorable conditions on the labor market such as logistical links sufficiently stable to meet international trade, free trade agreements that guarantee preferences in major markets for customers and geographical proximity to Chinese and Indian raw material producers. Vietnam is the most beneficial nation by drawing further investments. Therefore, in the coming years in Bangladesh, Cambodia and Myanmar, the costs will increase as well.
The study identifies India and Indonesia as potential beneficiaries in terms of global costume exports of manufacturing shifts and development. However, the annual growth rates of both countries will be less impressive than the four other countries, including Vietnam, Bangladesh, Cambodia and Myanmar. The study noted that the lack of preferential trade access and higher labor costs to the US and EU markets is a major obstacle to both. The report estimates a high potential for growth in textile production, backed by large and increasing active populations and low cost of labour, in neighboring countries such as Cambodia, Myanmar, Bangladesh and Vietnam.
