INDIAN clothes maker T.R. Vijaya Kumar thinks it’s time for his country to take on Bangladesh, Vietnam and even China for leadership in the global apparel industry.

    He’s a second-generation manufacturer, who’s transformed his small family undershirt business in southern India into an apparel exporter of 1,700 employees and aims to double its sales by 2020.

    When it comes to his hometown of Tiruppur, which is often referred to as the knitwear capital of India, his ambitions are even greater: tripling exports and adding 500,000 jobs in the process.

    “The next China will be Tiruppur,” Kumar said from the offices of his company, CBC Fashions Pvt., as he showcased a hard-cover action plan for the city that he and other manufacturers sponsored. “The cost of production has gone up in China, they are phasing out textile. Opportunities will go to other countries, so we are to grasp it.”

    The trouble is that other Asian nations are way ahead. India’s US$17 billion exports of apparel were about half as much as Bangladesh’s last year and its 3.7 percent global market share lagged behind Vietnam’s 5.1 percent.

    Closing the gap is crucial: Apparel is a labor-intensive industry, which has historically helped developing economies transition out of agriculture. The Indian economy needs to generate 80 million new jobs by 2025 to keep up with its fast growing young population.

    Prime Minister Narendra Modi’s biggest failure so far has been an inability to boost employment, according to a recent poll ahead of as many as seven state elections in 2017.

    His government recently announced a nearly US$1 billion package for textile and garment makers, including subsidies for hiring, tax refunds and relaxation of overtime rules with a goal to create 10 million jobs and boost exports by $30 billion in the next three years. ICRA Ltd., the local unit of Moody’s Investors Service, called the target challenging as demand slows in importing countries.

    “The window of opportunity is narrowing and India needs to act fast if it is to regain competitiveness and market share in apparels,” Arvind Subramanian, the Finance Ministry’s chief economic adviser and Rashmi Verma, the Textiles Secretary, wrote in a June op-ed explaining the measures.

    Adding to the challenge, the textile industry suffered a reputation blow last month, when Target Corp. terminated $90 million of business with Welspun India Ltd. for labeling cheaper bedsheets as premium Egyptian cotton.

    A key weakness of the sector is worker productivity, which is almost three times lower than in China. That’s in part because Indian apparel manufacturers tend to be unregistered and smaller than in competing countries, limiting the use of modern production technologies and the capacity to take on large orders, according to a study to be published next year by the Asian Economic Policy Review, a biannual journal from the Japan Center for Economic Research.

    That gap could widen as foreign garment and textile producers continue to embrace automation. “India needs to start climbing the ladder fast to take advantage of its young population,” said Russell Green, an international economics fellow at Rice University’s Baker Institute for Public Policy in Texas. “Automation is making the ladder shorter and shorter over time.”

    About 78 percent of Indian companies employ less than 50 workers, compared with 15 percent in China, according to Subramanian. That also means a lot of them remain below the threshold of government taxes and regulation, known by economists as the “informal” economy.(SD-Agencies)