India's garment exports have faced challenges in recent years. According to a research report, which of the following is identified as the primary reason for the decline in India's garment exports?

Solution

India's garment exports in 2023-24 were reported at $14.5 billion, which is lower than the $15 billion in 2013-14, and significantly behind Vietnam's $33.4 billion and Bangladesh's $43.8 billion. The research report attributes this decline primarily to India's high duties, import barriers, and complex customs procedures. These factors have created significant challenges for Indian exporters, forcing them to rely on expensive domestic raw materials and leading to overpriced Indian garments. The report also indicates that the Production-Linked Incentive (PLI) scheme for textiles, launched in 2021, has not been successful in attracting investors and needs substantial modifications. Furthermore, India's garments and textiles imports have surged to almost $9.2 billion in 2023, with potential for further increases if export issues are not addressed. The complex procedures and import restrictions imposed by the Directorate General of Foreign Trade and Customs are seen as outdated, necessitating a comprehensive overhaul to simplify the import process and support export growth. Therefore, the primary reason for the decline in India's garment exports is the self-inflicted issues of high duties, import barriers, and complex customs procedures, rather than the competitive strengths of other nations like Vietnam and Bangladesh.