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EFF SOURCE Fashion business success without compromise

1 January 2010


Contributor Ethical Fashion Forum

Indian hand printing

China is just one player in the Asian textile industry. Countries like Cambodia, India, Sri Lanka and Nepal are also significant producers, with many communities specialising in traditional textile production methods (handloom, embroidery, etc.) artisanal handicrafts or a strong sustainability focus.


1. India
2. Cambodia
3. Vietnam
4. Sri Lanka
5. Nepal
6. Summary
7. The Future
8. Useful Links

1. India

In India, the textile industry is the second largest employer after the agricultural sector. From 2008 to 2012, garment exports have grown by 21.15% (Fibre2fashion, 2013).

Fibre production is a major part of the industry and India has a long-rooted history in this field. Cotton fibre comprises almost 60 percent of the total production, next to silk, jute, wool and man-made fibres.

India is also the world’s biggest producer of organic cotton, supplying 74% of the total organic cotton in 2011/12 (Textile Exchange in its 2012 Farm & Fibre Report).

But India also offers one of the most diversified exports of textile and clothing supplies in Asia. Present facilities are able to meet small and large-scale as well as customised orders.

Traditional artisanal skills such as block printing, embroidery, batik, beading, kalamkari, hand spun and hand loom fabrics, natural dyed fabric and yarn, tie / dye are also to find in India.

The domestic market in India is also growing strong with many Indian consumers asking for artisanal products combined with modern designs.

However, doing business with India can pose quite a challenge due to the small scale of most Indian firms (80% of textile units are small cottage industries with less than 11 workers). Further barriers include illiteracy and lack of technology, infrastructure and cross-cultural understanding.

2. Cambodia

Since 1993, the manufacturing industry in Cambodia has been growing enormously and now constitutes 16 percent of the total GDP and 85 percent of the country’s exports (Garment Manufacturers Associaction in Cambodia).

91 percent of the 335,00 workers employed in Cambodia are female.

The majority of factories are focused on the final garment production phase, offering only cut, make and trim works. Textiles are mainly imported from China and other Asian countries.

As Cambodia is one of the world’s 49 least developed countries (LDC’s), it is part of the ‘Everything but Arms’ (EBA) initiative allowing duty and quota-free access to the United States and EU markets. This advantageous economic treatment might weaken in the coming years as Cambodia is developing.

Cambodia’s garment industry is still characterised by very low production costs and lower-than-average wages.

In 2001, the Better Factories Cambodia program was set up aiming to improve working conditions in Cambodian factories. The program has attracted investments and big brands from the U.S. to source in Cambodia, such as GAP, Levis or Disney.

Nevertheless, Cambodia is still facing social issues in its factories. Garment workers do not believe in the BFC program as it focuses more on the interests of brands and factory owners than on workers’ rights.

Health and safety issues in particular are posing a problem in Cambodia. According to the Ministry of Labour, 1,600 factory workers fainted in 2012, due to poor air quality, overheating, exposure to chemical fumes, exhaustion and malnutrition.

These condition have led to increased workers’ unrest and strikes during the past years. Low earnings have also motivated workers to change industry and move to neighbouring countries for higher wages.

Since may 2013, the Cambodian government has raised the minimum wage to $80 per months. Factory workers however, continue to strike asking a minimum of $100 per month.

However, Cambodia also has a long and vibrant tradition of silk production and still supports the livelihoods of many rural communities in the Khmer region.

3. Vietnam

Vietnam is the fifth biggest textile exporter worldwide employing approximately 1.3 million workers. The textile industry is the country’s strongest export sector and accordingly plays an important part in increasing the national prosperity.

Although most of the textile and apparel factories are only operating cut and sew processes, VINATEX, the Vietnam National Textile and Garment Group, is making investments which aim to develop more upstream capacities such as a viscose fibre plant, compact spinning mill, greige fabrics plant and a dyeing plant.

But further investments are also being made in training capabilities for workers. The textile industry and VINATEX are aiming to offer high quality trainings and to set up vocational school and college programmes. In this way, Vietnam is striving to build the competitiveness of their textile and apparel industry.

The Government of Vietnam also has high future hopes for the garment industry and has estimated a total of $25 billion investment capital for 2020. Textile companies are making continuous investments in new machinery and equipment in order to increase competitiveness.

Current strengths of the industry include a relatively stable political environment, low costs, highly skilled workforce, modern facilities and water treatment systems, incentive policies and an international recognition of high-quality goods.

4. Sri Lanka

The textile and apparel industry is the largest manufacturing sector in Sri Lanka and is mainly export-focused.

In an aim to be the world’s first destination for responsible and ethical apparel sourcing and manufacturing, The Sri Lankan government has adopted fairly strict environmental protection standards, legislations on working conditions or social security contributions.

‘“Garments without Guilt”:http://gwg.garmentswithoutguilt.com’ is an organisation pursuing a more sustainable and ethical textile industry and acts as the guiding principle for Sri Lanka to achieve this goal. Over 90 percent of apparel exports in Sri Lanka have already been certified by the SGS.

The country’s textile and apparel industry prides itself in producing ‘guilt-free’ apparel, without the involvement of child labour, sweatshop practices or other social issues. Sri Lanka also claims it’s the most carbon efficient apparel industry worldwide.

Sri Lanka is therefore a potentially strong sourcing destinations for businesses aiming to produce in an ethically and environmentally responsible way.

5. Nepal

The garment industry in Nepal is still relatively young and ready-made garment production started off with imposed quotas on Asian textile and apparel exports in the 1970’s. Nepal then served as a lower-cost alternative and a relocation opportunity when these quotas were already reached in India or China.

Since the quota system was abolished in 2005, Nepal has been struggling to keep the garment industry alive. Political instabilities and missed restructuring opportunities have made it even more difficult.

Many of the manufacturing facilities are not in use, lower-cost Chinese textiles are representing a competition, and factories have to deal with power cut-offs and labour disputes.

There remain several rural communities specialising in beautiful handknit wool and silk textiles and garment but they face very little market access.

6. Summary

Including China, the textile and apparel industry in Asia still represents the biggest exporter of textiles and apparel worldwide. In general, Asia is also seeing a growing middle class and advancements in technology.

Next to China however, other countries are also representing a strong textile and manufacturing focus or are working on further developing this.

India is the second largest supplier of textile and clothing goods while it also offers a wide spectrum of artisanal handicrafts.

Cambodia’s textile and clothing industry has been growing, but the country is still struggling with social unrest, especially in the apparel sector.

The Vietnamese industry is supported by the national textile and garment group (VINATEX) which is aiming to improve workers education and train high-skilled labour.

Sri Lanka is counting on the demand for sustainably and ethically-produced goods and is building their textile industry on the principle ‘Garments without Guilt’.

On the contrary, the industry in Nepal is rather struggling after the phasing out of the quota system.

In general, the Asian textile industry is trying to abolish their sweatshop image and is working to comply to western requirements of more sustainable production and processes.

7. The Future

Investment in Cambodia’s textile industry is growing. However, compared to other Asian countries, Cambodian factory workers are rather unskilled. The GMAC has therefore set up the first garment training institute.

Vietnam is very likely to face a bright future for its textile and apparel industry. Ongoing investments in workers’ education and modern factory facilities are strengthening the competitiveness, making Vietnam an attractive destination for sourcing and manufacturing.

Sri Lanka is strongly building on ‘Ethical Apparel & Responsible Business’. And although it is a relatively small country in size, this focus and expertise could potentially make Sri Lanka an important sourcing destinations and an best practice industry in the future.

8. Useful Links

Textile World Asia

‘“Garments without Guilt”:http://gwg.garmentswithoutguilt.com’, Sri Lanka

Fairtrade Group, Nepal

Ministry of Textiles, India

Beginners Guide to Sustainable Sourcing : India (EFF)

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