India ranks among the world’s leading apparel exporters. It has an abundant domestic cotton supply, and cotton items account for about three-quarters of its apparel exports. Indeed, 13 of the 14 major clothing types exported from India to the EU are cotton products.
The industry is characterized by a huge number of small-scale enterprises with the ability to take on small customized orders, and the flexibility to respond to quick changes. This structure stems from past government policies aimed at enhancing economic welfare and increasing employment. With these objectives in mind, the Indian government reserved many products–including woven and knitted apparel products–for exclusive production by small-scale units. However, the policy has now been phased out and, encouraged by the elimination of the global quota system at the end of 2004, the number of big players is growing.
The EU and the USA are the biggest destinations for Indian apparel exports, between them taking 70%. The UAE has an 8% share but it is thought that most UAE imports are re-exported. In 2006 India was the third largest apparel exporter to the USA and the fifth largest supplier to the EU.