Upgrading in the Indian Garment Industry: A Study of Three Clusters

30 Pages Posted: 30 Mar 2017

See all articles by Saon Ray

Saon Ray

India Habitat Centre - Indian Council for Research on International Economic Relations (ICRIER)

Prithvijit Mukherjee

Georgia State University, Andrew Young School of Policy Studies, Department of Economics, Students

Mishita Mehra

University of Washington, College of Arts and Sciences, Department of Economics, Students

Date Written: April 29, 2016

Abstract

This paper examines the process of upgrading of the Indian garment industry through a survey of 100 firms in three clusters in Delhi National Capital Region (NCR), Tirupur, and Mumbai in 2012. Upgrading could be of three types: process, product, or functional. Product upgrading entails producing higher value added products and involves steps taken to upgrade product quality, introduction of new fabrics and raw materials, and reduction in reworking rates. Process upgrading occurs through the incorporation of more sophisticated technologies in production and/or reengineering. Process upgrading takes place through use of new production machinery, worker training, reduced delivery time, total quality programs, new organizational approaches, improvements in the production process, and increased use of computer programs and internet for business purposes. Functional upgrading involves moving to higher value functions and occurs through design, marketing, and branding; most value addition occurs in this stage of production. Most firms surveyed reported investing in some form of upgrading. Product upgrading was the least commonly reported type, followed by functional and process. Little or no upgrading was reported by domestic firms, mostly in Delhi NCR and in large firms. The governance structure of the value chain determines functional upgrading.

Keywords: India, garments, garment industry, Indian garment industry

Suggested Citation

Ray, Saon and Mukherjee, Prithvijit and Mehra, Mishita, Upgrading in the Indian Garment Industry: A Study of Three Clusters (April 29, 2016). Asian Development Bank Economics Working Paper Series No. 43. Available at SSRN: https://ssrn.com/abstract=2941857 or http://dx.doi.org/10.2139/ssrn.2941857

Saon Ray (Contact Author)

India Habitat Centre - Indian Council for Research on International Economic Relations (ICRIER) ( email )

Core 6A, Fourth Floor Lodhi Road
New Delhi, 110003
India

Prithvijit Mukherjee

Georgia State University, Andrew Young School of Policy Studies, Department of Economics, Students ( email )

35 Broad Street
Atlanta, GA
United States

Mishita Mehra

University of Washington, College of Arts and Sciences, Department of Economics, Students ( email )

Box 353330
Seattle, WA 98195-3330
United States

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