A number of US retail chains and apparel companies are following in the footsteps of the likes of Wal-Mart and Target and are stepping up outsourcing of textiles from India. The Federated group, Russell Corporation, Sears Roebuck and The Limited figure among American retail majors which are finalising additional orders from India. Some of these importers also plan to form joint ventures with Indian manufacturers.
Several top executives from these companies have flown down to India for choosing dedicated suppliers. For instance, Russell Corporation's vice-president (international operations) Juan Rutzde Vinaspre has met with probable suppliers from Mumbai, Silvassa and Ahmedabad.
"Russell is keen on enhancing outsourcing from India," said an industry source on condition of anonymity. Similarly, executives from other retail chains are also making factory visits to take stock of capacities. While some of them are already buying from India, they are now trying to zero in on new suppliers who can supply large quantities.
Industry sources said that several new US-based buyers are flocking to India. The world's largest retailers like Wal-Mart, Target and JC Penney have already stated their intention to step up outsourcing from India. JC Penney's president (purchase), for instance, was in India last week. He had addressed a meeting of suppliers in New Delhi. He also held discussions with executives from key apparel-makers including the Aditya Birla group company Madura Garments. "JC penny plans to source $700-800m worth of apparels from India over the next few years," said an industry source. While Wal-Mart has a buying office in Bangalore, JC Penney and Target have buying offices Mumbai and New Delhi respectively. Other global chains are also setting up buying offices in India.
The focus on India is undoubtedly due to the phasing out of quotas under the multi-fibre agreement in January '05. Also, US companies feel that heavy dependence on a country like China can actually backfire in the long-run. "We get a feeling from US buyers that they do not want to put their eggs in China's basket alone. They are banking on a country like India which can provide large quantities," said a Mumbai-based dedicated supplier for retail chains. Though apparels continue to account for major chunk of outsourcing from the US, share of home textile products are also increasing by leaps and bounds. India also has the advantage of having a large base of cotton which is the main raw material for textile products.
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