The Hindu Business Line : Wal-Marts, JC Penneys making orders bigger

TWO months into the textile quota phase-out, Indian textile suppliers are emerging with a significant presence on the sourcing plan of major retailers in the US and the European Union for the next couple of years.

Wal-Mart, the world's biggest retailer, plans to source $11-billion worth of textile merchandise, or about 5 per cent of its requirements, from India over the next few years. JC Penney, which outsourced around $500 million of textiles from India during the last financial year, plans to jack up the sourcing to around $2 billion over next two years, according to industry sources.

During the current year itself, JC Penney — which sources mainly textile products such as garments, towels and home furnishings, as well as shoes and accessories — is expecting a 20 per cent increase in purchases from the country.

Marks & Spencers, Tommy Hilfiger, Carrefour and GAP are among those that have increased their orders. These players have already increased or are in the process of hiking their sourcing of textile items from India, industry sources said.

Several of the bigger US and EU retailers are now shifting from the third-party buying office model to establishing their own wholly owned sourcing and buying offices.

"The dismantling of the trade quotas has been a trigger point for the Indian textiles sector. The global market share of Indian textiles in expected to go up and Indian exporters have geared up for the opportunity with huge expansion plans," Mr Abizer Dewanji of KPMG said.

Following the spurt in demand from the big foreign retailers, the country's textile and apparel exports are expected to grow by nearly 30 per cent in value terms during the next fiscal, according to industry estimates. India exported about $13 billion worth textile and apparel products last year, and this figure is slated to grow to over $20 billion by the end of the 2005-06.

The country is projected to double its share of the world textile and apparel market from 3 per cent in a couple of years and by 2010, textile exports are expected to touch the $50 billion-mark.

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