South Asia has an emerging and rising economy with ideal business opportunities. In this article, I explore opportunities and challenges in Pakistan, India, and Bangladesh.
In India, the middle class is rapidly growing with an increasingly powerful manufacturing sector.
The GDP has been holding steady at close to 7% every year from 1997 to 2016.
The Projected GDP development of India for the year 2018-2019 is expected to be 7.3% which will be the highest in the world.
The economy crossed the trillion dollar mark in 2007 and is expected to turn into a $5 Trillion economy by 2025.
India is the second largest producer of cotton at 6423 metric tons compared to China at 6532 metric tons. It is the largest producer of jute products with 63% of the global production.
For textiles, India has a depth of suppliers in raw materials (such as cotton, wool, silk, and jute), enabling participation in the entire fashion value chain.
India’s garment industry is among the worlds biggest (ranked number four at $18B in 2017, following Vietnam at $26B) for manufacturing and export, employing 12.9 million people in formal factory settings, and millions more indirectly in informal, home-based settings.
In India, average labor costs are significantly lower than China’s and comparable to Vietnam’s.
A major challenge with India is its low-quality infrastructure, which continues to lag behind that of many other Asian countries (China, Taiwan, Malaysia, Philippines, and Vietnam). Nearly 40 percent of the Indian road network was unpaved as of 2016. Poor infrastructure can make last-mile deliveries difficult.
Almost all workers – 99% – were subject to conditions of forced labor under Indian law. These workers did not receive the state-stipulated minimum wage. In most cases, they received only a tenth of their legal wage.
Roughly one in five home-based garment workers in India are aged 17 and under, according to one study, which interviewed 1,452 workers. The officially youngest individual interviewed was 10 years old, but researchers witnessed dozens of younger children.
The vast majority of home-based workers (85%), said they worked exclusively in supply chains for clothing shipped to the US or EU.
On a retail front, the apparel business is still largely unorganized, with formal retail accounting for just 35 percent of sales in 2016.
Brands that are successful in India have understood Indian consumer habits; colors they consume, what kind of designs appeal, differing touchpoints and personalization that may be very different from a consumer living in New York or Hong Kong.
Prime Minister Mr. Narendra Modi is executing activities that not exclusively will encourage ventures into India. Relaxed regulations on foreign direct investment (for example, allowing 100 percent foreign-owned single-brand retail operations) will probably lead to more overseas-originated activity through the value chain.
The current list government has established the following initiatives; Make in India, Start-up India, Digital India, Skill India, and Smart Cities.
Pakistan is the fourth largest producer of cotton globally and fashion accounts for 20% of its exports.
Some of the larger factories in Pakistan which are part of the organized sector of the industry supply international apparel brands. But most garment factories cater to the domestic market, with the work carried out in small unregistered workshops in unmarked buildings that escape labor inspectors’ scrutiny.
Pakistan is regarded to be top-most profitable small sized business houses. You can find the best low-cost investment airlines that permit for best opportunities to start a business in Karachi.
You can also find excellent career ideas and other trends for men, women covering internet youth in Lahore. Moreover, just visit Pakistan for business innovations.
Retail fashion never was an isolated factor of mere clothing or dressing up, it has been connected with the changing political and social values of the country.
Because of the strict rules and regulations in Pakistan, the industry holds its fashion week in London. Young and middle-class women have moved to the forefront in the battle for Pakistan’s cultural identity.
Bangladesh is the world’s second largest exporter of ready-made garments for the global fashion industry (after China). 4,500 textile and clothing factories shipped more than $30bn worth of apparel last year. The country is feeling the effects of orders shrinking from 600,000 units on a six-month cycle to as little as 500 units per style, monthly.
Responding to this change is posing significant problems for the sector, which makes up 80% of Bangladesh’s total exports.
The country has the largest number of LEED-certified green garment factories in the world. It’s a good choice for those wanting to buy sustainable clothing.
Women historically made up 80% of the RMG (Ready-made Garments) workforce in Bangladesh. As the supply chain modernizes with Automation the female workforce has been reduced to 53%. Men are taking on the new digitized jobs for no reason other than cultural bias.
SK Jenefa Jabbar, Director Human Rights, and Legal Aid Services said “all stakeholders must collaborate more closely to ensure that the transition to digitization doesn’t overlook women. Women are not heard. They are overlooked.”
Bangladesh has had structural issues with buildings collapsing, fires, and explosions among other labor issues.
Earlier this year, there was a protest of over 5,000 workers who shut down the operations of 52 factories to complain about the poor pay conditions. Minimum wages for the lowest-paid garment workers rose by a little over 50% this month to 8,000 taka ($95) a month. But mid-level tailors said their rise was paltry and failed to reflect the rising costs of living, especially in housing.