Textiles and Clothing in India
Bangladesh and Vietnam: India's Garment Rivals
How Bangladesh and Vietnam became garment export giants, why India's garment exports lagged, and what lessons India can learn.
Despite its size and cotton, India exports fewer garments than Bangladesh or Vietnam.
Bangladesh
- Garments make up the vast majority of its exports.
- Built on low wages, duty-free access to Europe as a least developed country, and huge factories.
Vietnam
- Integrated into global supply chains through trade agreements with the EU and others.
- Attracted foreign investment in large, modern factories.
Why India lagged
- Small factories: many Indian units are small, limiting scale and big orders.
- Labour laws that discouraged growth beyond certain sizes, though new labour codes aim to change this.
- Higher input costs, especially for synthetic fabrics.
- Fewer trade deals giving tariff advantages, until recent agreements.
- Logistics costs and delays.
Scale matters
Global brands prefer suppliers who can deliver huge orders fast and reliably. A factory with thousands of machines wins over dozens of small units.
India’s trade deals
India’s agreements with the UAE (2022), Australia (2022), the EFTA countries (2024) and the UK (2025) give garments better market access, which could help.
A Bangladeshi factory with 5,000 workers can complete a million-piece order in weeks. An Indian unit with 200 workers must subcontract to others, adding delays and quality risks.
Scale, costs, trade access and logistics matter as much as raw materials.
- Bangladesh and Vietnam export more garments than India.
- Their advantages include scale, trade access and investment.
- India's small factories and high input costs held it back.
- New trade agreements may improve India's access.
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