Garments have emerged as the star-performer in the Indian Textile export scenario by the sheer magnitude of the achievement recorded by this industry. Look at Table below which allows India’s exports of readymade garments. The exports have increased from $2583.41 in 1993-94 to $4807.92 in 1999-2000. The garment sector has achieved an impressive export performance over the years despite stiff international competition. It must also be mentioned that the Indian garment industry is primarily in the small scale sector with a fairly low capital investment. Even though the total exports of India in this sector may be far lower than many of its competitors like Hong Kong, South Korea or Taiwan, the growth rate achieved by this country is reported to be far higher than most.

The Indian garment export sector has maintained a pattern of steady growth over the years. A number of reasons have been mentioned for the escalating exports from this industry. Some of the factors responsible for the export growth of this sector are recounted below.

1. Rising Labour Costs in Development Markets: Studies conducted by various research agencies in the past had found that many of the developed markets found it difficult to maintain their garment manufacturing operations due to rising labour costs. In fact many of these nations found it more economical and cost-effective to import their requirements of clothing from the developing countries where there was relative abundance of labour and whose wages were also far lower.
2. Shift to Technology Intensive Industries: The 1970’s was also the period when many developed nations shifted their focus to the creation and strengthening of some of the hi-tech industries like computer hardware and Software, electronics, ship building etc. Certain industries which were basically labour oriented and pollution prone like textiles, clothing and leather industry were progressively de-emphasised since these did not basically fit into the economic profile of many of the developed countries.