Case Study on Textile Sourcing in India

Dragon Sourcing
Your Tailored Approach to Emerging Markets
www.dragonsourcing.com
Textiles Sourcing Study in India
Nov, 2017

www.dragonsourcing.com© 2017 Dragon Sourcing. All rights reserved. 2
Table of Contents
 Executive Summary
 Top Export Categories
 Indian Economy Overview
 Precious Metals
 Mineral Fuels
 Automobiles
 Industrial Machinery
 Pharmaceutical Products
 Organic Chemicals
 Apparels & Products (Not Knitted/Woven)
 Electrical, Electronic Equipment
 Apparels & Products (Knitted/Non-Woven)
 Cotton
 Cereals
 Iron & Steel Products
 Iron & Steel
 Plastics & Plastic Products
 Made-up Textile Products
 Dragon Sourcing – India
 Disclaimer

How Export of Textile Categories Stack Against Top Indian
Exports
Category
2015
Export
Value in
USD
Billion
HS
Code
Top Products
2015
Export
Value in
USD
Billion
CAGR of
Exports
Value
(2011-
2015)
India’s
share of
Global
Exports
(2015)
Top Export Destinations
Import Duty into
US
Import Duty into
EU
Export Duty
Precious
Metals
38.49 HS 71
Diamonds 21.87
-6.34% 6.37%
USA, Hong Kong, USA, Belgium,
Israel
Free-13.5%
(Silver clad with
precious metal)
Free-2.5% (Silver
clad with
precious metal
Export permission
is required if the
SCOMET items
Jewelry articles 9.99
Gold 5.31
Mineral
Fuels
31.39 HS 27 Petroleum oil 30.45 -13.68% 1.69%
UAE, Singapore, USA, Saudi Arabia,
Kenya
Free - 84¢/bbl
(Wastes of
lubricating oils
and greases)
Free -3.5%(Waste
oils)
Export subject to
NOC from Ministry
of Petroleum and
Natural Gas
Automobile 14.08 HS 87
Cars 5.39
8.18% 1.07%
USA, Mexico, Sri Lanka, South Africa,
Turkey
Free-25%(Motor
vehicles for goods
transportation)
16% (Road
tractors for semi-
trailers)
Export permission
is required if the
SCOMET items
Motor Vehicle Accessories 3.89
Motorcycles, side-cars 1.78
Industrial
Machinery
13.23 HS 84 Tap, cock, valve for pipe, tank 1.16 5.32% 0.69% USA, UAE, UK, Germany, China
Free – 6.7%
(Steam turbines)
4.20% (Marine
propulsion
engines)
Export permission
is required if the
SCOMET items
Pharmaceuti
cal Products
12.54 HS 30 Medicament mixtures 11.24 11.01% 2.53%
USA, South Africa, UK, Nigeria,
Russia
Free - 5% (Gel
preparations)
6.5%(Urea)
Export allowed
subject to
obtaining No
Objection
Certificate from
DGHS
Organic
Chemicals
11.30 HS 29
Heterocyclic compound 1.58
0.34% 3.07%
USA, China, Germany, Netherlands,
Japan
Free - 6.5%
(Oleic, linoleic or
linolenic acids)
5.5%(Chlorometh
ane (methyl
chloride) and
chloroethane
(ethyl chloride))
NOC from
Department of
Chemicals&Petro
chemicals,
Ministry of
Chemicals&Fertili
zers
Cyclic hydrocarbons 1.34
Apparel &
Products
(Woven)
9.35 HS 62
Women's suits, jackets,
dresses skirts etc. &shorts
2.69
4.18% 4.15% USA, UAE, UK, Germany, Spain
Free - 41.9%(Suit-
type jackets &
blazrs - trousers
worsted wool)
12%(Hand-made
ponchos)
Exports permitted
under licence
Women's blouses & shirts 1.63
Men's suits, jackets, trousers
etc. & shorts
1.19
Electrical,
electronic
equipment
7.94 HS 85
Electric transformer, static
converter
1.16
-9.33% 0.34% USA, UAE, UK, Germany, France
Free - 1.3%
(Transmission
apparatus)
4.7% (Motors of
an output not
exceeding 37,5W)
Export permission
is required if the
SCOMET items
Electric app for line telephony,
incl curr line system
0.79
© 2017 Dragon Sourcing. All rights reserved. 3

How Export of Textile Categories Stack Against Top Indian
Exports
Category
2015
Export
Value
in USD
Billion
HS
Code
Top Products
2015
Export
Value in
USD
Billion
CAGR of
Exports
Value
(2011-
2015)
India’s
share of
Global
Exports
(2015)
Top Export Destinations
Import Duty into
US
Import Duty into
EU
Export Duty
Apparel &
Products
(Non-
Woven)
7.78 HS 61
T-shirts, singlets and other
vests
2.86 7.59% 3.47% USA, UAE, UK, Germany, France
Free -
28.2%(Overcoats,
carcoats, capes,
cloaks, anoraks)
12%(Overcoats,
car coats, capes,
cloaks and similar
articles)
Exports permitted
under licence
Cotton 7.47 HS 52 Cotton yarn 3.74 -1.06% 13.44%
China, Bangladesh, Pakistan,
Vietnam, Sri Lanka
Free -
16.5%(woven
fabrics of cotton)
4% (Cotton
Sewing Thread)
Prior registration
of contracts with
DGFT
Cereals 6.85 HS 10 Rice 6.38 6.26% 6.75%
Saudi Arabia, Iran, UAE, Iraq,
Bangladesh
Free - 1.8¢/kg
(Rice)
12.8% (Seed of
wheat and meslin,
for sowing)
Free
Iron & Steel
Products
6.51 HS 73
Cast Products 1.02
0.04% 2.32%
USA, UAE, Germany, Saudi Arabia,
UK
Free -
12.5%(Screws,
bolts, nuts, coach
screws)
2.7% (Switch
blades, crossing
frogs, point rods
and other
crossing pieces)
Export permission
is required if the
SCOMET items
Structures (rods, angle, plates) 0.99
Iron & Steel 6.30 HS 72
Ferro-alloys 1.31
-5.55% 1.95% USA, Iran, Italy, UAE, Nepal
Free - 10%
(Ferrosilicon
chromium)
7% (Ferro-
chromium)
Export permission
is required if the
SCOMET items
Flat-rolled products 1.29
Plastic
Products
5.01 HS 39 Polymers of propylene 0.77 -2.14% 0.91% USA, China, UAE, Turkey, Italy
Free -
6.5%(Fasteners,
in clips suitable
for use in a
mechanical
attaching device)
6.5% (Polymers of
ethylene)
No export
permission is
required for
supply of
SCOMET items
from DTA to SEZ
Other
Apparel &
Products
(Woven)
4.62 HS 63
Furnishing articles 1.65
4.65% 7.61% USA, UK, Germany, UAE, Australia
Free - 20.9%
(Cotton printed
bed linen, not
napped)
12% (Blankets
and travelling
rugs, of wool or of
fine animal hair)
Exports permitted
under licence
Bed, table, toilet and kitchen
linens
1.43
© 2017 Dragon Sourcing. All rights reserved.
Textile categories are some of the largest export categories from India, making a combined export
value of USD 29.2 Billion in 2015
4

-
0.5
1.0
1.5
2.0
2.5
USA UAE UK Germany Spain
Top Importers of HS 62 series (Apparel &
Products (Woven)) from India in USD billion
2011 2012 2013 2014 2015
79 , 35%
15 , 7%
13 , 6%12 , 5%9 , 4%
97 , 43%
World Export of HS 62 series (Apparel &
Products (Woven)) in USD billion in 2015
China Bangladesh Vietnam Italy India Rest of World
7.94
7.43
8.74 9.06 9.35
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
2011 2012 2013 2014 2015
Export of HS 62 series (Apparel & Products
(Woven)) from India in USD billion
Export Value
Apparels & Products
(Woven)
USD 9.35
billion
100%
Women's suits, jackets,
dresses skirts etc. &shorts
USD 2.7
billion
28.7%
Women's blouses & shirts
USD 1.6
billion
17.5%
Men's suits, jackets,
trousers etc. & shorts
USD 1.2
billion
12.8%
Percentage
ShareCategory
Apparels & Products (Not Knitted/Woven) (1/2)
5© 2017 Dragon Sourcing. All rights reserved.

Apparels & Products (Not Knitted/Woven) (2/2)
Characteristics India’s Position
Industry Structure
The Indian textiles industry is extremely varied, with the hand-spun and
hand-woven textiles sectors at one end of the spectrum, while the
capital intensive sophisticated mills sector at the other end of the
spectrum.
India’s % share in Global
Exports (2015)
4.15%
India’s % share in total
exports from India(2015)
3.5%
CAGR of Exports (2011-
2015)
4.18%
Imports (2015) USD 0.314 billion
Import duty into US Free - 41.9%(Suit-type jackets & blazrs - trousers worsted wool)
Import duty into EU 12%(Hand-made ponchos)
Road Ahead
The textiles sector has witnessed a spurt in investment during the last
five years. The industry (including dyed and printed) attracted Foreign
Direct Investment (FDI) worth USD 1.85 billion during April 2000 to
March 2016.
Gujarat
Tamil
Nadu
Maharashtra
Bihar
West
Bengal
Karnataka
 The Department of Handlooms and Textiles, Government of India, has tied up with nine e-commerce players and 70 retailers to increase the reach of
handlooms products in the Indian market, which will generate better prices and continuous business, besides facilitating direct access to markets and
consumers for weavers.
 The organized apparel segment is expected to grow at a Compound Annual Growth Rate (CAGR) of more than 13 per cent over a 10-year period.
Source: ibef.org, International Trade Centre

-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
USA UAE UK Germany France
Top Importers of HS 61 series (Apparel &
Products (Non-Woven)) from India in USD billion
Series1 Series2 Series3 Series4 Series5
84 , 37%
15 , 7%
11 , 5%9 , 4%8 ,3.47%
98 , 44%
World Export of HS 61 series (Apparel &
Products (Non-Woven)) in USD billion in 2015
China Bangladesh Vietnam
Hong Kong, China India Rest of World
5.81
5.47
6.96
7.48 7.78
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
2011 2012 2013 2014 2015
Export of HS 61 series (Apparel & Products (Non-
Woven)) from India in USD billion
Export Value
Apparels & Products (Non-
Woven)
USD 7.78
billion
100%
T-shirts, singlets and other
vests
USD 2.9
billion
36.7%
Men's shirts
USD 0.8
billion
9.7%
Women's suits, dresses,
skirt etc. & short
USD 0.7
billion
9.5%
Percentage
ShareCategory
Apparels & Products (Knitted/Non-Woven) (1/2)

Apparels & Products (Knitted/Non-Woven) (2/2)
Industry Structure
The decentralized power looms/ hosiery and knitting sector form the
largest component of the textiles sector.
Exports (2015)
3.47%
2.9%
2015)
7.59%
Import duty into US
Free - 28.2%(Men's/Women’s or boys‘/girls’ overcoats, carcoats,
capes, cloaks, anoraks)
Import duty into EU 12%(Overcoats, car coats, capes, cloaks and similar articles)
Road Ahead
The technical textile industry is expected to expand at a CAGR of 9.6
per cent during FY14–23 to USD32 billion in FY23. The targeted
market size would be achieved by targeting non-woven technical
textiles.
 The domestic textile and apparel industry in India is estimated to reach USD141 billion by 2021 and USD100 billion by 2017 from USD67 billion in
2014.
 Total cloth production in India is expected to grow to 112 billion square metres by FY17 from 64.3 billion square metres in FY15.
 Healthcare and infrastructure sectors are major drivers of the technical textile industry
Source: ibef.org, International Trade Centre
Gujarat
Tamil
Nadu
Maharashtra
Bihar
West
Bengal
Karnataka

-
1.0
2.0
3.0
4.0
5.0
China Bangladesh Pakistan Viet Nam Sri Lanka
Top Importers of HS 52 series (Cotton) from India
in USD billion
2011 2012 2013 2014 2015
16 , 28%
7 , 14%
6 , 11%4 , 7%
2 , 4%
20 , 36%
World Export of HS 52 series (Cotton) in USD
billion in 2015
China India USA Pakistan Hong Kong, China Rest of World
7.80
8.57
11.29
8.88
7.47
-
2.00
4.00
6.00
8.00
10.00
12.00
2011 2012 2013 2014 2015
Export of HS 52 series (Cotton) from India in USD
billion
Export Value
Cotton
USD 7.47
billion
100%
Cotton yarn (not sewing
thread) 85% or more
cotton, not retail
USD 3.7
billion
50.0%
Cotton, not carded or
combed
USD 1.9
billion
24.9%
Woven cotton fabrics, 85%
or more cotton, weight less
than 200 g/m2
USD 1. 0
billion
13.6%
Percentage
ShareCategory
Cotton (1/2)

Cotton (2/2)
Industry Structure India is one of the largest producers as well as exporters of cotton yarn
Exports (2015)
13.44%
2.8%
2015)
(-)1.06%
Import duty into US
Free - 16.5%(woven fabrics of cotton: Weighing not more than 200
g/m²:Unbleached (Containing 36% or more by weight of wool or fine
animal hair)
Import duty into EU 4% (Cotton Sewing Thread)
Road Ahead
With various measures by Government of India under Technology
Mission on Cotton, better availability of quality certified seeds and
truthful label seeds, increased usage of Bt seeds and the changed
mindset of cotton farmers towards improved farm practices by adopting
new techniques like High density planting system, intercropping etc.,
the productivity of cotton in the country over the years had been
continuously increasing.
Gujarat
Andhra
Pradesh
Maharashtra
Madhya
Pradesh
Punjab
Haryana
Karnataka
Tamil Nadu
Rajasthan
 The cotton cultivation in India in stands at 12.25 million hectares in the year (2014-15) against about 11.5 million hectares in year (2013-14).
 Major importers of Indian textile: Various reputed foreign retailers and brands such as Carrefour, Gap, H&M, JC Penny, Levi Strauss, Macy's, Marks &
Spencer, Metro Group, Nike, Reebok, Tommy Hilfiger and Wal-Mart
Source: ibef.org, International Trade Centre, The Cotton Corporation of India Ltd., The Cotton Textiles Export Promotion Council

-
0.5
1.0
1.5
2.0
2.5
USA UK Germany UAE Australia
Top Importers of HS 63 series (Made-up Textile
Products) from India in USD billion
2011 2012 2013 2014 2015
3.85 3.97
4.71 4.61 4.62
-
1.00
2.00
3.00
4.00
5.00
2011 2012 2013 2014 2015
Export of HS 63 series (Made-up Textile
Products) from India in USD billion
27 , 44%
5 , 8%4 , 6%
3 , 4%
2 , 4%
20 , 34%
World Export of HS 63 series (Made-up Textile
Products) in USD billion in 2015
China India Pakistan Germany USA Rest of World
Export Value
Made-up Textile Products
USD 4.62
billion
100%
Furnishing articles
USD 1.7
billion
35.7%
Bed, table, toilet and
kitchen linens
USD 1.4
billion
30.9%
Sacks and bags of a kind
used for the packing of
goods
USD 0.6
billion
13.7%
Percentage
ShareCategory
Made-up Textile Products (1/2)

Made-up Textile Products (2/2)
Industry Structure
India is home for some of the world’s biggest producers in the segment
like Welspun, Trident and Dicitex. Many Indian brands like Indian
Drape, RR Décor, F & F, Maspar, Goldtex, ABN, Portico New York,
Birla Century, Spread, Swayam, MYCK, Zyneand Super Net, etc. are
recognized nationally and are growing at a healthy pace. A large
number of international brands like Zimmer+Rhodes, Designers’ Guild,
Esprit Home, Harlequin, United Colour of Benetton have experienced a
20-30% annual growth in the Indian market.
Exports (2015)
7.61%
1.7%
2015)
4.65%
Import duty into US Free - 20.9% (Cotton printed bed linen, not napped)
Import duty into EU 12% (Blankets and travelling rugs, of wool or of fine animal hair)
Road Ahead
With growing awareness towards environment, safety, hygiene and
functionality, the demand for better quality home textiles with features
like stain-resistance, flame retardant, fragrance, etc. is increasing.
Gujarat
Karnataka
Maharashtra
Madhya
Pradesh
New Delhi
Rajasthan
Tamil
Nadu
West Bengal
 India is globally recognized and appreciated for its wide variety and exquisite designs in home textiles & furnishing fabrics.
 Made-ups constitutes about 12% of India’s textile exports, as on 2013-14. Bed linen is the major export product category and exports are growing with
increasing quality & design capabilities of Indian manufacturers
Source: ibef.org, International Trade Centre, hghindia.com

Dragon Sourcing Representative Office in India
Dragon Sourcing’s Representative Office in India was established in 2008 with an objective to help clients create
significant and sustainable value (cost, quality and service) in the procurement of their goods and services by
leveraging the capabilities of India’s supply markets. Dragon Sourcing India office also covers other countries in the
region such as Bangladesh, Thailand, Malaysia and Pakistan
Dragon Sourcing’s aim is to develop long term relationship based on trust, full transparency and business integrity
with a limited number of Western and American Corporations with Suppliers of Asian LCCs as Malaysia,
Bangladesh, India which experience unprecedented and exponential economic growth, either:
 To support your procurement departments to identify, qualify, select and manage on an on-going basis with LCC
suppliers for export purposes
 To support your procurement departments in LCC’s to implement world class sourcing practices for (1) your local
needs, and (2) for your localization requirements
Our ability to provide end-to-end service from strategy formulation through to procurement operations
A business model which ensures that we work exclusively for the benefit of the buyer
Total transparency and sharing of all information with the client
Deep procurement process expertise combining operational and consulting skills allowing us to provide a high quality
service across a wide range of categories
An engineering and technical background combined with a deep understanding of industrial B2B buying practices
and requirements

Examples of Categories
Shoes
Candy
Cotton bag
Wooden furniture
Wicker furniture
Stainless steel furniture
Tent
Mechanic tool
Office supplies
Electro-mechanical components
Plastics bag
Castings
Disposables (garbage bags,…)
Fabric and Stitching
Fabrics
Aluminum extrusion
Uniforms/casual
Chemicals
Seafood
Our clients are essentially large multi-nationals. We have done extensive sourcing work on
textiles in India. We have also successfully sourced (or are in the process of sourcing) an
extensive set of spend categories for these clients
Sourcing at Dragon Sourcing Office in India

www.dragonsourcing.com15© 2017 Dragon Sourcing. All rights reserved.
Examples of textile & apparels
categories handle by India
office.
Towels
• Beach towels, terry towels,
others.
Knitted Garments,
• T-shirts, cotton trousers, work
wear, Sweaters, Others.
Woven Garments,
• Shirts, Sport wear, swim wear,
others.
Denims,
• Jeans, shirt, skirt, others.
Others,
• Kitchen Linen
• Table Linen
• Duvet covers.
• Cotton Bags
• Unger garments.
• Socks
Our clients are essentially large multi-nationals. We have done extensive sourcing work on
textiles in India. We have also successfully sourced (or are in the process of sourcing) an
extensive set of spend categories for these clients just to name a few,
Sourcing at Dragon Sourcing Office in India

© 2017 Dragon Sourcing. All rights reserved.
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Case Study on Textile Sourcing in India

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