Which of the following factors is primarily responsible for the decline in India's garment exports in 2023-24 compared to the previous decade, as highlighted by the Global Trade Research Initiative (GTRI) report?

Solution

The decline in India's garment exports in 2023-24, which stood at $14.5 billion, is primarily attributed to high duties and barriers on raw material imports, according to the Global Trade Research Initiative (GTRI) report. This issue is compounded by complex customs and trade procedures, which hinder the efficient importation of necessary materials. While competitors like Vietnam and Bangladesh have shown significant growth in their garment exports, the report clarifies that India's struggles are not due to the competitive strengths of these nations but are self-inflicted problems. The report also points out that India's Production Linked Incentive (PLI) scheme for textiles, introduced in 2021, has not been effective and requires significant modifications to attract investors. Additionally, difficulties in obtaining quality raw fabric, particularly synthetic fabric, due to Quality Control Orders (QCOs) and reliance on expensive domestic supplies, further exacerbate the situation, making Indian garments overpriced. The outdated procedures of the Directorate General of Foreign Trade and Customs necessitate a comprehensive overhaul to improve India's garment export performance.